The São Paulo government concluded this Tuesday (23), on the B3 Stock Exchange, the privatization of the Basic Sanitation Company of the State of São Paulo (Sabesp). The government of São Paulo sold, for R$ 14.7 billion, 32% of the company’s shares, and now holds 18.3% of the company – before the privatization process, this percentage was 50.3%. 
Of the 32% of shares sold by the government, 15% were purchased for R$6.9 billion (each share for R$67) by Equatorial Participações e Investimentos, which became the reference investment company – the group was the only one to make an offer to take over the position. The remaining 17% of the shares were sold, for the same share price (R$67), to individuals, legal entities and employees of the company, which yielded an additional R$7.8 billion to the São Paulo government.
The price of the shares sold in the company’s privatization, R$67 each, was below the current value of the shares (R$87), but above the price at the beginning of the privatization process, at the end of February 2023, when they were traded at R$53.
With privatization, the anticipation, from 2033 to 2029, of the goals for universal sanitation in the state of São Paulo, and the Regional Basic Sanitation Plan, which foresees investments of R$69 billion until 2029 to bring drinking water, treatment and sewage collection to the entire population, come into effect.
The reduced rate also came into effect on Tuesday. The price will be 10% cheaper for social and vulnerable rates, 1% lower for residential rates and 0.5% lower for other categories.
Reference investor
The only company to make a proposal to become the reference investor of the new Sabesp, Equatorial will have the right to nominate three members to the company’s Board of Directors. Three other nominations will be from the São Paulo government, and three more will be independent.
In the sanitation area, Equatorial operates in Amapá, through its company Companhia de Saneamento do Amapá (CSA), which has been in operation since July 2022, serving approximately 800 thousand people. Sabesp provides services to 375 municipalities and has 28 million customers.
According to the Investment Agreement, the reference investor will not be able to sell its shares until December 2029, when investments to universalize sanitation in the state are expected to be completed. It will also be prohibited from participating in other projects competing with Sabesp in municipalities in São Paulo through other companies in which it is a partner.
