Minas Gerais Pushes Privatization Plans for Copasa and Cemig

The Minas Gerais state government in Brazil has proposed the privatization of its water utility, Copasa, and the power company, Cemig. This move is aimed at addressing state debt with the federal government. Shares of both companies experienced significant gains following the announcement.

The government of Minas Gerais in Brazil announced its intent to privatize two key state-owned enterprises: the water utility Copasa and the power firm Cemig. This proposal, filed on Thursday, aims to address significant state debt to the federal government.

Both Copasa and Cemig, traded on the Sao Paulo stock exchange, saw their shares rise sharply following the news. Cemig's stocks surged by up to 9%, while Copasa experienced a nearly 6% increase, pushing both to session highs.

The state retains a pivotal control over Cemig, despite the company's proposed transition to a corporation, by holding a 'golden share' with veto rights. Details on Copasa's privatization strategy, however, remain undisclosed.

(With inputs from agencies.)