Government veto undermines market of up to BRL 90 billion – 03/09/2023 – Market

The federal government has vetoed the use of precatories for the payment of concessions, generating an alert among executives of large banks and investment funds that manage up to R$90 billion in potentially affected assets.

Precatories are Union debts recognized by Justice in a final decision. The information that the government wants to stop the use of these papers in infrastructure was given by the Minister of Ports and Airports, Márcio França, after a meeting with Minister Fernando Haddad (Finance) on Wednesday (8).

“The guidance that the Ministry of Ports and Airports received and has already passed on to interested companies indicates that precatorios will not be accepted as a form of payment for grants at airports,” he told Sheet Minister Márcio Franca through his office.

The folder explained that it is waiting for an ordinance from the AGU (Attorney General of the Union) that, at this moment, reassesses the use of precatories for the payment of grants.

In 2021, the Jair Bolsonaro (PL) government changed the rules related to precatorios by articulating a constitutional amendment enacted by Congress which determined, among other rules, that these titles can be used for the initial payment of infrastructure concessions.

This movement encouraged banks to enter this field, buying debt securities issued by the Court. Market projections indicate that, at this moment, financial institutions have acquired around R$ 30 billion from a set of up to R$ 90 billion.

However, the statement by the Minister of Ports and Airports triggered a kind of “circuit breaker”, according to a bank interviewed by Sheet. The expression in English refers to the signal issued by the Exchange to suspend the purchase and sale of shares.

The paralysis of business occurs in the wake of recent clashes with the government, which had already made it difficult to use precatories in 5 cases — 3 of them involving concessions. One of them, involving Rumo, ended up in court.

The most recent is that of the Spanish group Aena, which delivered precatorios to pay the initial contribution of R$ 2.45 billion for the 7 airports^The round —which includes Congonhas, in São Paulo.

As reported to Sheet, the contract depends on this payment to be signed. And, without that, the concession has no legal validity – keeping the Spaniards away from the command of airports.

Aena questioned Anac about the delay — two months ago, the civil aviation regulatory agency has been discussing with the government the procedures to operationalize the execution of the titles.

The paralysis situation put the entire market at risk. According to the director of another fund for investment in precatories, other foreign investment companies, groups of retirees, universities and private investors invested more than US$ 2 billion in the purchase of Brazilian precatories driven by the liquidity guaranteed by the amendment.

Still according to this director, now, these investors question the fund about the credibility of Brazil. They cannot understand how the government makes it difficult to comply with a constitutional determination.

Anac, for example, claims that it complies with the legislation and that the procedures for signing the concession contract with Aena follow the normal course, within the deadlines defined by the notice.

Internally, however, there is a discussion on how to operationalize the transformation of precatorios into payment.

The concern, according to the agency’s technicians, is the receipt of a security that, eventually, may have some subsequent judicial questioning —what is called “rescission action”.

The PGFN (Attorney General of the National Treasury) rules out this possibility. Titles with rescission action, in general, refer to fraud —a rare case nowadays, according to technicians consulted by the report.

In Anac’s understanding, however, it would not be its role to verify the precatories —which explains the delay in solving the case.

Aena sent three questions to Anac in the last two months asking for explanations. Last week, he ended up sending the precatories, but the outcome is still unknown.

Sought by the report, the Treasury asked that the Sheet question the Civil House and the Ministry of Ports and Airports on the subject. The Civil House and the AGU did not respond until the publication of this report.