By Brazil Stock Guide – Companhia de Saneamento Básico do Estado de São Paulo, Sabesp (SBSP3), approved the payment of R$1.798 billion (US$ about 360 million) in interest on equity, reinforcing its shareholder remuneration strategy as Brazilian companies accelerate payouts ahead of expected tax changes on dividends.
The payment corresponds to R$2.63 per share, with shareholders on record at the close of trading on December 23, 2025, eligible to receive the proceeds. The shares will trade ex-JCP from December 26, and the cash payment is scheduled for April 30, 2026, according to a notice released after a board meeting held on December 18.
Interest on equity is a Brazil-specific payout that allows companies to remunerate shareholders while treating the payment as a tax-deductible expense, reducing corporate income tax. The mechanism has gained renewed relevance as lawmakers debate changes that could end or limit its deductibility, prompting companies to lock in distributions under the current rules.
In Sabesp’s case, the JCP will be fully offset against mandatory dividends for the 2025 fiscal year, in line with the company’s dividend distribution policy, and will not be subject to monetary adjustment. Income tax will be withheld at source, except for shareholders who qualify as immune or exempt and submit documentation by March 30, 2026.
The payout comes as Sabesp navigates a strategic transition following the privatization of its control by the state of São Paulo, with investors closely watching how the company balances capital discipline, infrastructure investment needs and shareholder returns under its new ownership structure.
While the payment will only be settled in April, the economic entitlement is locked in 2025, placing Sabesp squarely within Brazil’s year-end “dividend race” — a rush by listed companies to secure tax-efficient payouts before the regulatory window potentially closes.
Leave a Reply