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Brazil's Caixa seeks foreign partner for Lotex auction

Caixa Econômica Federal is looking for a foreign company to be a minority partner in its instant lottery business Lotex which could be auctioned next year, Valor Econômico reported.

According to Caixa Instantânea President Rubens Santos, the state-owned bank has to find a partner for the Lotex sale due to a minimum transaction requirement which it does not reach. Foreign operators, however, would be able to meet this rule, Santos added.

Caixa believes its extensive lottery network and knowledge of the Brazilian market would serve as important "intangible" capital to attract a potential partner for the auction. If necessary, Caixa also has resources to help pay for the granting of the concession auction, Santos said. These resources would have to be sourced from unit Caixa Participações SA, since the bank is currently facing capital constraints.

In August, the state-run bank lost its battle for Lotex with the federal government, which is planning to grant the concession to the private sector. The Lotex concession could raise about $630 million, according to government estimates.