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Brazil's Rio Grande do Sul expects to complete Banrisul stake sale by December

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Brazil's Rio Grande do Sul expects to complete Banrisul stake sale by December

The government of the Brazilian state of Rio Grande do Sul expects to complete in December a potential public offering in which it may sell a part of its stake in Banco do Estado do Rio Grande do Sul SA, Valor Econômico reported, citing the state's treasury secretary, Giovani Feltes.

The state government also aims to sign an agreement with the bank's union before concluding the sale of the shares, Feltes said.

While the sale of the stake will free up resources for the state, Feltes said an agreement with the national Treasury to enter the tax recovery program remains "indispensable." The official did not comment on the amount the sale would bring to the state's finances.

The state government has already submitted a proposed agreement to the ministry of finance and a meeting is scheduled for Oct. 11 with national Treasury secretary, Ana Paula Vescovi. It expects a pre-agreement or even a definitive entry into the recovery program "as soon as possible," Feltes said.

Rio Grande do Sul is considering selling all of the common shares it does not need to retain control of the bank, and could also sell preferred shares. The state government, which declared a state of financial calamity in November 2016, owns a 56.97% stake in the company.