July 31, 2019 / 2:32 PM / 24 days ago

Brazilian sewage co Igua Saneamento mulls IPO: sources

SAO PAULO (Reuters) - Brazilian sanitation company Iguá Saneamento SA is considering an initial public offering (IPO) to raise money for investments, three people with knowledge of the matter said.

The company is discussing a potential offering with the investment banking units of Banco Bradesco SA (BBDC4.SA), Itau Unibanco Holding SA (ITUB4.SA), Banco BTG Pactual SA (BPAC3.SA) and Banco Santander Brasil SA (SANB11.SA), the sources said. No final decision has been made.

Iguá declined on Wednesday to comment on a potential IPO.

The company currently runs 18 sewage and water concessions and public-private partnerships in five Brazilian states, serving 6.6 million people.

Its first-quarter revenue rose nearly 45% from a year earlier to 216 million reais. Still, net income fell 48% to 4.3 million as the company spent more on construction projects.

Canada’s Alberta Investment Management Corporation (AIMCo) injected 400 million reais into Iguá Saneamento a year ago, acquiring an undisclosed stake in the company through an investment vehicle.

Iguá’s main shareholders include private equity funds managed by Brazilian firm IG4 Capital and also the state development bank BNDES, through its holding company BNDESPar.

The sanitation company was divested by the group controlling Galvão Engenharia SA, one of the Brazilian construction conglomerates forced to sell assets after it was entangled in the sweeping Car Wash corruption investigation. Still, the sale of a remaining stake in Iguá occurred this month.

If Iguá succeeds in listing its shares, it will join three other sanitation companies on the Sao Paulo stock exchange: Sabesp SA (SBSP3.SA), Copasa SA (CSMG3.SA) and Sanepar SA (SAPR4.SA).

Reporting by Carolina Mandl; Editing by Bill Trott

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