COPASA R$8.4 Billion Privatization

Cleary Gottlieb represented Companhia de Saneamento de Minas Gerais (COPASA) and Estado de Minas Gerais (the State of Minas Gerais) as selling shareholder in the privatization of COPASA through a secondary offering of COPASA’s common shares in Brazil, with international placement efforts in the U.S. and other jurisdictions outside Brazil.

The transaction involved the State of Minas Gerais selling its controlling stake in COPASA that was valued at approximately R$8.4 billion, with the State of Minas Gerais retaining a 5.03% stake in the company, including a special class of preferred stock (a golden share). The offering also committed a priority allocation of 30% of COPASA’s common shares to Gerais Saneamento S.A. (Equatorial), which was selected as the reference investor through a bidding process conducted in Brazil in connection with the offering. Outside Brazil, the offering was conducted with private placement efforts under Rule 144A of the Securities Act of 1933 and outside of the U.S. in reliance on Regulation S.

COPASA is one of the largest basic sanitation companies in Brazil, providing water supply and sewage services across the State of Minas Gerais. The privatization constitutes one of the most significant state privatizations in Brazil in recent years and the second largest privatization in the sanitation sector in Brazilian history.

The Cleary corporate team included partner Jonathan Mendes de Oliveira, associate David Schechtman, and international lawyer André Bandeira de Mello. Partner Matthew Brigham and associate Michael Hughes advised on tax matters.