Caixa opens lottery tender as officials defend privatisation

People or companies interested in operating Caixa Econômica federal lotteries will be able to submit their proposals until July 21, with the tender process set to take place in seven Brazilian states: Acre, Goiás, Pará, Pernambuco, Paraná, Rondonia and São Paulo. 

Initially, the tender will be carried out digitally, as Brazil is navigating the effects of the pandemic, as BNL Data reported.

Given the possibility of privatising large companies in the country, the Economy Minister Paulo Guedes has revealed that the goal is for this to happen in 2020. Although he did not say which companies could be privatized, Guedes did in fact mention Caixa, which is expected to be on the list.

“[At Caixa], we can raise $5.5bn, $7.5bn or $9.5bn in an initial public offering (IPO),” said Guedes, according to Games Magazine Brasil.

In an interview with CNN Brasil, the minister said that there’s “great hidden value” in state-owned companies, and that the public bank has already made a request to offer Caixa Seguridade shares.

In 2019, the President of Caixa Pedro Guimarães revealed the intention of launching an IPO for its payment service, followed by Caixa Loterias and its asset manager. “I would like to privatize all state companies,” he said.

Last week, the Privatization Secretary of the Ministry of Economy Salim Mattar unveiled a proposal to privatize 12 state companies, but in 2021.

According to the Brazilian Supreme Federal Court (STF), the state can only sell the parent companies of the state companies, since they need authorization from Congress. Subsidiaries, such as Caixa Loterías, are excluded from this regulation.

Back in May, Deputies Enio Verri, Perpétua Almeida, Fernanda Melchionna and Joenia Wapichana presented Project 2715/20, aiming to prevent all privatization processes from being carried out by the public administration in Brazil for 12 months, after the government lifts the state of emergency, which will be in place until the end of 2020.

“History shows us that crises are excellent for those who buy, and a terrible time for those who sell,” said the deputies. “After a crisis like this one, asset prices fall, create a hostile environment for offers, and a large liquidation among quality companies,” they added.