By Brazil Stock Guide – Brazil’s power regulator ANEEL approved on Tuesday the transfer of control of EMAE to Sabesp (SBSP3), moving ahead with a key transaction despite an ongoing legal challenge from the current shareholder. The Phoenix Fund, which controls EMAE and is linked to businessman Nelson Tanure, is attempting to block the deal in court.
The ruling confirms ANEEL’s view that there is no legal impediment to an administrative decision even while litigation is pending. Reporting director Agnes Costa had already voted in favor of the transfer in December, concluding that the regulator could rule independently of the judicial dispute. After requesting a review, director Gentil Nogueira presented his vote last week, also backing the approval.
ANEEL’s green light follows a parallel decision on the competition front. On Monday, in a virtual plenary session, Brazil’s antitrust authority CADE rejected an appeal filed by the Phoenix Fund and upheld its prior clearance of the transaction, removing a major regulatory hurdle.
The approvals represent key procedural milestones but do not, in themselves, complete the effective transfer of the company’s controlling interest, EMAE said in a statement filed with Brazil’s securities regulator CVM. The company added that it will keep the market informed of any further developments as the process moves forward.
Daniel Szlak, Sabesp’s CFO, said the effective completion of the transfer of corporate control remains subject to additional formalities set forth in the purchase and sale agreements entered into with Vórtx Distribuidora de Títulos e Valores Mobiliários Ltda. and Axia Energia, which are currently in the process of implementation.