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Brazil – Caixa to sell off Brazilian lottery as part of Initial Public Offering

By - 11 February 2019

The President of Brazil’s largest state owned bank and lottery operator – the Caixa Econômica Federal (CAIXA) Pedro Guimarães, has announced that he intends to sell all of the assets that are not part of the bank’s main activity.

The intention is to sell in principle a minority share of the shares, between 10 per cent and 20 per cent of the units.
“We are not considering an IPO in which we would divest a controlling stake”, Mr. Guimaraes said.

The measures do not require legislative approval. According to Mr. Guimarães, four subsidiaries of the bank will be sold in the areas of lotteries, insurance, cards and asset management. He made the announcement while speaking at an event of the Credit Suisse bank for investors in São Paulo.

He said at least two assets will be sold later this year with the first one being the lottery. The president of Caixa pointed out that, until June 2020, in a forecast that he himself considers conservative, the offering of the four subsidiaries will be publicly listed. According to Guimarães, the sale of subsidiaries will help Caixa to pay union contributions to the bank amounting of R$40bn.

He also said that, in addition to the B3 (the stock exchange located in São Paulo), the shares of these companies will also be offered on the New York Stock Exchange. According to Guimarães, the government’s objective of selling assets is to prepare Caixa for the future. “In order for the next governments to have more solid, more profitable cash,” he explained.

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