SÃO PAULO, Aug. 3, 2017 /PRNewswire/ -- Companhia de Saneamento Básico do Estado de São Paulo – Sabesp ("Company" or "Sabesp"), pursuant to the provisions of Article 157, Paragraph 4 of Law No. 6404/76 and the provisions of CVM Instruction No. 358/02, announces to its shareholders and to the market in general that, on this date, the Government of the State of São Paulo sent to the Legislative Chamber of the State of São Paulo a Bill that provides for a shareholder reorganization of Companhia de Saneamento Básico de São Paulo – Sabesp and other measures.
The Bill, among other provisions:
- Authorizes the Executive Branch to set up a corporation, governed by Federal Law 6,404 / 76, with the purpose of grouping basic sanitation assets and others with operations and in segments related to its primary object ("Controlling Company");
- Provides that the Controlling Company shall, among others, exercise control of the Company and assist the Government of the State of São Paulo in the implementation of public policies in the area of basic sanitation;
- Determines that the Government must retain ownership of the majority of the voting capital of the Controlling Company, being allowed the participation of other shareholders in a minority position;
- Provides that private shareholders will be admitted to the Controlling Company with the purpose of providing capital, add value to the business and strengthening corporate governance in the Company and the Controlling Company, as long as they do not restrict the ability of the São Paulo State Government to guide them in achieving the Public interest that justified its creation;
- Establishes that the Government of the State of São Paulo is authorized to:
(i) Pay for its shareholding in the Controlling Company by transferring the shares held in
(ii) Increase the Sabesp's share capital with payment in cash or assets, including by
public offer of shares in the capital market; and
(iii) Sell or encumber the shares of the Controlling Company, or the respective
subscription rights thereof, provided that most of the voting capital is permanently
- Provides for the signing of a management agreement between the Government of the State of São Paulo, the Controlling Company and the Company, in order to strengthen their administrative and financial efficiency.
The submission of the Bill to the Legislative Chamber of São Paulo is a necessary step in the process of a possible capitalization of Sabesp and is part of the steps that must be fulfilled, with the first having already been initiated and announced in the Material Fact disclosed on May 12, 2017 – "Preliminary Studies on Alternatives for the Company's Capitalization".
The full text of the Bill on the corporate reorganization of the Company will be published in the DOE (Official Gazette of the State of São Paulo) on August 3 and it will be available at www.sabesp.com.br/investidores.
The company will keep the market up to date on the progress of the matter within this material fact.
SOURCE Sabesp (Companhia de Saneamento Básico do Estado de São Paulo)