Tag Archives: privatization

UPDATE 2-Agreement with CPPIB Canada helps Igua Brasil in the privatization of Cedae-source | Instant News


(Adds details about Igua’s interest in privatization, the advisor in charge of selling Cedae)

SAO PAULO, March 22 (Reuters) – Canadian pension fund CPPIB acquired a 45% stake in Brazilian sanitation company Igua Saneamento SA for 1.18 billion reais ($ 213 million), according to a statement on Monday.

CCPIB said it would acquire 514 million reais ($ 93.4 million) of new shares issued by Igua Saneamento and 664 million reais in existing shares.

The deal reinforces Igua’s bid for the privatization of Rio de Janeiro’s Cedae sanitation company, a source with knowledge of the matter said on Monday.

Igua has hired investment banking units Banco Bradesco SA and Banco BTG Pactual SA to advise on bids in the auction scheduled for April 31, added the person, who requested anonymity to reveal private discussions.

CPPIB’s support could also help fund another deal the company is considering, the privatization of the sanitation company Corsan, in the state of Rio Grande do Sul, the source added.

After CADE approves the acquisition of CPPIB, existing investor Alberta Investment Management Corporation (AIMCo) will hold a 39% stake in Igua, Brazilian development bank BNDES will own 11% and private equity firm IG4 Capital Group will retain 5%.

CPPIB said the two private equity funds managed by IG4’s asset managers would remain Igua’s controlling shareholders.

This new funding round underscores investor interest in the sanitation sector as new laws passed in June are expected to encourage states and cities to privatize water and sewage companies and to universalize services in Brazil.

For now, Igua is suspending plans for an immediate initial public offering expected for this year. However, Igua kept a mid-term plan for listing. The CPPIB acquisition contract has a clause in which the company commits to conduct an IPO within three years. ($ 1 = 5,5057 reais) (Reporting by Carolina Mandl and Tatiana Bautzer in Sao Paulo Editing by Bernadette Baum and Matthew Lewis)

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Brazil to cut its stake in Eletrobras to 45% from 61% in privatization – energy secretary | Instant News


SAO PAULO, February 24 (Reuters) – The Brazilian government will cut its stake in power company Centrais Eletricas Brasileiras SA, or Eletrobras, to 45% from the current 61% in the planned privatization process, a senior official at the Energy Ministry told Reuters. Wednesday.

The ministry’s Energy Secretary Rodrigo Limp said the government expects its stake in Eletrobras to double in value to 60 billion reais ($ 11 billion) with the increase in share price that privatization hopes will bring.

President Jair Bolsonaro presented a bill to Congress on Tuesday that would accelerate the divestment in Brazil’s biggest utility.

$ 1 = 5.4062 reais Reporting by Luciano Costa, Editing by Rosalba O’Brien

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Italy will continue to advance with sales of Monte dei Paschi under Draghi – sources | Instant News


ROME (Reuters) – Italian Prime Minister Mario Draghi’s new government aims to tackle troubled bank Monte dei Paschi by pushing a plan to re-privatize its losing lenders, said sources close to the matter.

FILE PHOTOS: People seen inside the bank of Monte dei Paschi in Siena in Rome, Italy August 16, 2018. REUTERS / Max Rossi

Rome spent 5.4 billion euros ($ 6.6 billion) in 2017 to rescue Tuscan banks, leaving the state with a 64% stake. MPS now needs another 2.5 billion euros to rebuild its capital reserves.

A sale would stop the MPS from becoming a permanent taxpayer drain and would allow Italy to fulfill its commitments to the European Union made at the time of the bailout.

With Italy’s change of government, there is speculation that Draghi, the former head of the European Central Bank, could use his cachet with European authorities to buy more time and delay the sale of MPS.

But a source briefed on the government’s plans said both Draghi and Economy Minister Daniele Franco intend to continue working to seal a merger deal for MPS with stronger rivals.

The prime minister’s office declined to comment.

Finding MPS buyers has proven difficult despite the ample incentives from the Ministry of Finance to sweeten the deal.

Italy has negotiated the sale of MPS to UniCredit but a change at the helm of Italy’s second-largest bank has halted talks.

New UniCredit CEO Andrea Orcel, who started his job after mid-April, may prefer other options in Italy’s consolidated banking sector, sources said.

With the sales prospect fading in the near future, MPS auditors have expressed concern about the bank’s financial future, said three people with knowledge of the matter.

The MPS is working to ensure auditors sign off on its accounts, a formality required for Thursday’s board meeting, the people said.

MPS declined to comment.

Annual losses at Tuscan banks jumped more than 60% to 1.7 billion euros last year.

Reported by Giuseppe Fonte in Rome and Valentina Za in Milan. Edited by Jane Merriman

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Italy accepts Credit Agricole’s offer for Creval – source | Instant News


* PM Draghi accepts France’s offer after taking office

* Credit Agricole is offering 737 million euros for Creval

* Agreement to take advantage of tax breaks to boost corporate ties

ROME, February 15 (Reuters) – Italy has given the green light for a takeover bid for Credit Agricole Italy plans to launch for small lender Credito Valtellinese (Creval), two government sources told Reuters on Monday.

The offer by France’s Credit Agricole division requires approval from the Roman government, which reserves the right to block unwanted offers in strategic industries such as banking, telecommunications and healthcare.

The so-called “golden power” allows Rome to avert or set a strict prescription for takeovers in key industries from non-EU and – under an interim framework in effect until June 30 – also EU groups.

The Treasury Department last week sent to the cabinet office of former Prime Minister Giuseppe Conte a recommendation saying that no such special powers should be exercised in the Creval case.

But the government due out on Friday decided to leave the task in the hands of former European Central Bank President Mario Draghi, who was sworn in as prime minister on February 13.

The new cabinet met immediately after taking office and agreed to comply with the Ministry of Finance’s request, the two sources said.

The agreement was accompanied by non-binding recommendations, said one of the sources, without explaining what the suggestions were.

Italy’s Credit Agricole in November offered 10.50 euros per share to buy Creval for a total investment of 737 million euros ($ 893 million).

Creval shares have been trading consistently above the bid price. On Monday they fell 0.6% to 11.98 euros at 1510 GMT.

Analysts at Kepler Cheuvreux said they expect the offer price to be raised to at least 11.5 euros.

The deal, which is expected to launch formally in April, will benefit from tax breaks for the merger that Italy approved last year after the offer was announced, with a view to facilitating the privatization of bailed-out Monte dei Paschi bank.

Creval said the tax incentives required a potential profit of 350 million euros in a takeover context.

Creval, which is valued at around 846 million euros at current market prices, will provide an official opinion on the offer only after publication of the offer’s official prospectus.

Creval has said it will evaluate alternatives to bids that were not expected or approved. Sources said it was preparing to fight for shareholders at a higher price.

Some of Creval’s shareholders have turned down the offer as too low.

$ 1 = 0.8252 euros Report by Giuseppe Fonte, edited by Valentina Za and Jane Merriman

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Italy gives the green light on Credit Agricole’s offer for Creval – source | Instant News


* Italy has special vetting powers to protect key sectors

* The Treasury Department said powers should not be exercised in the Creval case

* Credit Agricole is offering 10.50 euros per share to buy Creval

* Third tier banks are struggling to get better rates – source

ROME, February 8 (Reuters) – Italy is ready to give an unconditional green light for a takeover bid. Credit Agricole Italy plans to launch small lender Credito Valtellinese (Creval), three government sources told Reuters.

An offer from Credit Agricole’s Italy branch must be approved by the government. Rome has the power to block unwanted offers in strategic industries, such as banking, telecommunications and healthcare.

The so-called “golden power” allows Rome to avert or set a strict prescription for takeovers in key industries from non-EUs and – under an interim framework in effect until June 30 – also EU groups.

The Treasury Department has sent to the cabinet office, which reports to the prime minister, a recommendation saying such special powers should not be exercised in the Creval case, the source said, asking not to be named because of the sensitivity of the matter.

The cabinet office will ask the minister to comply with the Ministry of Finance’s request.

The move could be the last decision of provisional Prime Minister Giuseppe Conte, as former European Central Bank president Mario Draghi stepped up negotiations with political parties to form a new cross-party coalition.

Except for a last-minute surprise, the cabinet meeting must formally approve an unconditional green light as early as Tuesday or Wednesday, one of the sources said.

Italy’s Credit Agricole in November offered 10.50 euros per share to buy Creval for a total investment of 737 million euros ($ 887 million).

Creval, who is awaiting publication of a formal bid document to respond to the offer, said he would assess options.

Sources familiar with the matter said Creval would struggle to get a higher price for its shareholders.

The deal, expected to be officially launched in April, benefits from tax breaks for mergers that Italy approved after the offer was announced, with a view to facilitating the privatization of bailed-out Monte dei Paschi bank.

Last year, the influential security committee (COPASIR) raised concerns about foreign interest in Italian financial firms, saying it could have negative implications for refinancing 2.7 trillion euros of sovereign debt.

European competition authorities approved a buy offer for Creval last week.

$ 1 = 0.8308 euros Report by Giuseppe Fonte; edited by Valentina Za and Jane Merriman

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