Tauil & Chequer Advogados advises on the structuring of the R$ 3 billion financing for the privatization of Corsan

Tauil & Chequer Advogados in association with Mayer Brown advised Aegea Saneamento, the leading private sanitation company in Brazil, on structuring the financing for the privatization of Companhia Riograndense de Saneamento (Corsan). This is the first privatization of a state-owned sanitation company in Brazil and aims to facilitate the achievement of the goals set out in the New Legal Framework for Sanitation.

The privatization took place through the strategic issuance of debentures by Parsan, the holding company of the winning consortium formed by Aegea, as well as investment managers Kinea and Perfin. The issuance totals R$3 billion and the offering was led by a syndicate comprising eight of the country's most important private banks.

The financing played a crucial role in enabling the privatization process, with its structuring and contracting of the syndicate's firm guarantee, initiated even before the consortium submitted its bid in the bidding process at the end of 2022. In addition, the financial structure of the acquisition included an additional financing by Aegea of R$ 550.5 million, disbursed on March 15, 2023 and specifically earmarked for Parsan's capital.

Currently, Corsan is responsible for water supply and sewage treatment in 317 of the 497 municipalities in Rio Grande do Sul, serving a population of more than 6 million people. After the acquisition of Corsan, the consortium plans to make significant investments in these municipalities to achieve universal sanitation coverage by 2033, in accordance with the sector's regulatory framework, in the amount of approximately R$ 13 billion. With the signing of the contract, the State will act as an overseer and regulator of these essential services and Aegea will expand its operations to 489 municipalities across Brazil, covering 13 states and benefiting more than 30 million people.

Partner Luis Montes and associate Beatriz Lavigne, from the Banking and Finance practice, led the legal advice throughout the financing process, as well as the strategic issuance of debentures by Parsan. In addition, the firm's Infrastructure, Public Law, as well as Corporate and M&A practices had already advised Aegea on the structuring of the privatization, whose work was consecrated as winner of the Deal of the Year by the international legal award Latin Lawyer Awards 2023, in the Regulatory category.