By Brazil Stock Guide – Copasa (CSMG3 BZ), the water utility controlled by the state of Minas Gerais, approved corporate changes ahead of a planned privatization expected between April and May, according to the minutes of an extraordinary shareholders’ meeting held on Monday (23).
Shareholders authorized the creation of a special preferred share to be held exclusively by the state government. The instrument will grant veto power over specific matters but, as stated in the meeting record, “will not have voting rights and will not grant any differentiated or more privileged economic or equity rights to the State of Minas Gerais in relation to other shareholders.”
The structure mirrors mechanisms adopted in previous Brazilian privatizations, including Sabesp (SBSP3 BZ), Copel (CPLE6 BZ) and Axia, formerly Eletrobras (ELET3 BZ). In the same meeting, investors approved a full revision of Copasa’s bylaws to adapt governance standards to its future status as a privately controlled company.
The new bylaws introduce updated corporate governance rules, anti-dilution safeguards and provisions tied to water resilience commitments, as well as compliance with state legislation. A voting cap was also established, limiting any shareholder or group of shareholders to 45% of voting capital, regardless of their ownership stake, in a move designed to prevent post-privatization concentration of control.
Resolutions were approved by a majority of votes, with shareholders representing 76.51% of voting capital in attendance. BNDESPar abstained from voting.
Copasa said the approved changes will only become effective after the settlement of the share offering to be conducted by the Minas Gerais government. The transaction is intended to migrate the company toward a dispersed ownership structure aligned with Novo Mercado listing standards on B3 SA Brasil Bolsa Balcão (B3SA3 BZ).
The privatization model follows the secondary share offering structure used by Sabesp in 2024 and includes the entry of a strategic investor. The deal could become the largest equity transaction on Brazil’s stock exchange this year, with estimates ranging from R$8 billion to R$10 billion.
Under the proposed structure, a strategic investor may acquire up to 30% of Copasa. The Minas Gerais government, which currently holds 51% of the company, would see its stake reduced to about 5%.
Potential bidders cited as market contenders include Aegea, Kinea, Perfin and Suez. Águas do Brasil is also seen as preparing a competitive financial structure to participate in the transaction.
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