Demand for Copasa shares in privatization reaches BRL66B

Demand for shares in the privatization of Copasa, Brazil’s largest water and sewage utility, has reached R$66 billion, reflecting strong investor interest in the offering. The Minas Gerais state government initiated the privatization process in May 2026, aiming to sell a 30% stake in the company to a strategic investor and an additional 20% to broader investors through a secondary share offering on B3.

Equatorial SA emerged as the sole bidder for the strategic investor role, committing to purchase a 30% stake in Copasa for R$5.59 billion (approximately $1.1 billion) at a price of R$49.03 per share, 3.8% above the minimum price set by the state government. A consortium led by Aegea and its shareholders, including Itausa and Singapore’s GIC, withdrew from the process, leaving Equatorial as the only candidate for the strategic role.

The second phase of the offering, which will allocate up to 20% of Copasa’s shares to broader investors, is set to be priced on June 11. Equatorial has also indicated its intention to purchase up to 48 million additional shares in this phase, potentially increasing its stake to 42.6% and raising its total investment to R$7.9 billion.

The privatization process has drawn attention due to its complexity and the lack of transparency in certain aspects, particularly after the government initially susended the offering due to bids falling below the minimum acceptable price. While the strong demand for Copasa shares suggests confidence in the company’s long-term prospects, the process has also raised concerns about public oversight and the need for greater transparency in privatization efforts involving essential public services.