By Brazil Stock Guide – The Minas Gerais Court of Accounts (TCE-MG) ruled Thursday (16) that preparatory steps for the privatization of water utility Copasa (CSMG3 BZ) may proceed, while maintaining a ban on actions that would transfer control of the company to private investors.
The unanimous decision, issued during an extraordinary plenary session, draws a clear distinction between internal preparatory measures and definitive actions such as the sale of shares in the market.
Reporting judge Agostinho Patrus emphasized that only internal steps — which do not alter the company’s ownership structure — are permitted at this stage. These include technical studies, audits, financial assessments, and the preparation of key documentation, as well as filings with Brazil’s securities regulator, the CVM, and submissions to stock exchange B3 SA Brasil Bolsa Balcao (B3SA3 BZ).
However, the court upheld restrictions on external actions, including any equity sale by the state government, effectively preventing a transfer of control.
“The advancement to this stage occurs because all questions raised so far have been properly addressed,” Patrus said in his vote.
The ruling also requires the Minas Gerais government and Copasa to notify the court within 48 hours of any relevant development in the process, reinforcing regulatory oversight.
Privatization of Copasa was approved by the state legislature in December as part of broader measures tied to the federal debt renegotiation program known as Propag. The state government aims to use proceeds from the potential sale to meet investment requirements linked to restructuring roughly BRL 200 billion in debt owed to the federal government over a 30-year period.
In 2026, the administration advanced structuring efforts, with the privatization model already defined within the company’s board and shareholder framework. The TCE-MG continues to monitor the process through multiple ongoing oversight proceedings.
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