Details of the privatization of Emae by the Tarcísio government

Awaited since the 1990s, the privatization of Metropolitan Water and Energy Company (Emae) a notice was published this Monday (18) by the Secretariat of Investment Partnerships (SPI) of the government of the state of São Paulo.

The sale of the company’s shares is in the plans of governor Tarcísio de Freitas (Republicans), who intends to attract R$100 billion in investments to São Paulo in 2024 through a robust auction schedule on B3, the São Paulo Stock Exchange .

The São Paulo government’s privatization portfolio foresees 20 projects and R$220 billion in investments.

With energy generation as its main activity, Emae is valued at R$ 2.3 billion and has four production units. The first of these includes the Henry Borden Hydroelectric Power Plants, a complex located in Serra do Mar, in Cubatão; the Porto Góes Plant, on the bank of the Tietê River, in the city of Salto; the Rasgão Plant, also on the banks of the Tietê River, but in the municipality of Pirapora do Bom Jesus; and the Pirapora Small Hydroelectric Plant, in the same city.

Emae is also responsible for crossing service operation at three points of the Billings Reservoir, in the south of São Paulo: the Bororé, Taquacetuba and João Basso ferries. According to the notice, the service will remain free after privatization.

Valuation of Emae shares

The shares will be sold in a single lot at the auction, with an offering of 14.7 million single class common shares. Of this total, 14.4 million are owned by the state of São Paulo and another 350 thousand are owned by the São Paulo Metropolitan Company (Metrô).

There are also 50,981 single-class preferred shares, belonging to the state of São Paulo. Emae employees will be offered 10% of the share capital, which corresponds to approximately 3.6 million shares worth the minimum price, in compliance with the law that established the State Privatization Program (PED).

Each share has a minimum value of R$52.85, so the offer will raise at least R$779 million in current values. According to the newspaper The state of Sao Pauloamong the possible interested parties are Amberfrom the J&F Group, the generator AurenThe CPFLthe Chinese CTG and the French EDF.

The Secretariat of Finance and Planning of the state of São Paulo holds 97.61% of Emae’s common shares, or 38.99% of the total capital, while Companhia do Metropolitano de São Paulo (Metrô) owns 2.39% of the common shares. , or 0.95% of the total capital.

Another important shareholder is Eletrobras, with 64.82% of the company’s preferred shares and 39.02% of the total capital. According to the B3 website, the remaining 21.05% of the company’s total belongs to other shareholders.

Next steps in the privatization of Emae

On April 15th, from 9am to 10am, companies interested in the Emae auction must deliver envelopes with the information required in the notice. One of the requirements is to present a financial guarantee of 1% of the total value stipulated for the sale of shares.

The opening of the envelope with the price offers will take place on April 19th, at 3pm, at the B3 headquarters, in São Paulo. The consortium that offers the highest value per share, above the defined minimum price, will win the auction. If there is a bid up to 20% lower than the best proposal presented, there may be open outcry during the session.