Company won the auction of two public-private partnerships to build sewage systems in Ceará
Rogerio Tavares — Foto: Divulgação
Aegea Saneamento will prioritize expanding in Brazil’s North and Northeast regions, said Rogério Tavares, the group’s chief institutional affairs officer.
On Tuesday, the company won the auction of two public-private partnerships to build sewage systems in Ceará, taking on about R$6.2 billion in investments to universalize services in 24 cities. The group won both contracts by offering discounts of 27.5% and 37.9% on the maximum remuneration to be paid for the services.
“The Northeast and the North regions are our priorities. I wouldn’t say the same thing about the other regions because in those we have little,” the executive told Valor on Wednesday.
“Everything will depend on what concrete opportunities arise. We will analyze them to see if they make sense, just like we will analyze projects in other places, but we will give more attention to these regions. Especially because most of the [country’s basic sanitation] deficit is there,” he said.
With the victory, the company, which had already consolidated itself as the largest private-sector group in basic sanitation in Brazil, now has operations in 178 cities and serves about 25.5 million people. In the Northeast region, Aegea already had municipal contracts in Crato (Ceará), Teresina (Piauí) and Timon (Maranhão). In the North region, the main asset is Manaus (Amazonas), but there are other municipalities in the portfolio, four of them in Rondônia and two in Pará.
Asked about Aegea’s financial situation with the two new contracts, Mr. Tavares said that the company will calmly support the new investments. The plan is to make a typical financing structure, with about 20% to 30% of own funds and loans with state-owned banks, or raise money in the capital market. The specific conditions, he said, will depend on the market situation at the time of contracting the loans.
He also highlighted that the debt-to-EBITDA ratio will remain below the limit of 3.5 times. The indicator was 2.57 times at the end of the second quarter.
The company is still willing to compete for new auctions, the executive said. “We will always study projects and, if it makes sense, we will participate.”
However, he stressed that there are no other concrete opportunities on the radar. Plus, the election season hinders the prospect of new projects this year. “This [Ceará’s] was the last clearly defined auction. From here on, nothing has a set date.”
“There is a possibility of [privatizing] Corsan [Rio Grande do Sul’s basic sanitation company], but we are not sure yet. An opportunity may still arise, but we will see. The end of the year is coming, with an election in the middle of the road. It is a complicated period. If it comes, we will study it,” he said.
In the executive’s view, regardless of the outcome of the elections at the federal and state levels, more business opportunities are expected for 2023. “I don’t think there will be any change in the process. After an initial period of three months [at the beginning of the new terms], things should start moving forward smoothly again.”
As for secondary-market opportunities, Mr. Tavares said the company has nothing on the radar.
*By Taís Hirata — São Paulo