By Brazil Stock Guide – The Minas Gerais state audit court authorized Copasa (CSMG3) on Monday (18) to open its shares to the financial market, allowing the state-controlled sanitation company to move into a new phase of its privatization process.
The ruling allows the Tribunal de Contas do Estado de Minas Gerais, known as TCE-MG, to monitor the process through to the final allocation of public proceeds.
According to the court, Copasa and its controlling shareholder, the government of Minas Gerais, complied with all previous requirements within the established deadlines and in line with legal rules. That cleared the way for the company to advance beyond preparatory steps.
In April, TCE-MG had already authorized preliminary measures for a potential privatization, including studies, registration with Brazil’s securities regulator CVM and submission of documents to B3, the São Paulo stock exchange. At that stage, however, the court maintained a restriction on any act that would amount to an effective sale of the company.
With Monday’s authorization, Copasa may proceed with steps including the opening of the share distribution period and settlement of the offering. Those measures could result in the transfer of the company’s controlling stake to private investors.
The court’s decision marks another step in the Minas Gerais government’s plan to reduce its role in the sanitation utility. TCE-MG said it will continue to oversee the process until the transaction is completed and the destination of public funds is defined.
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