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Brazilian state considers selling Banrisul stake

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Brazilian state considers selling Banrisul stake

The government of the Brazilian state of Rio Grande do Sul has expressed interest in a potential public offering in which it may sell a part of its stake in Banco do Estado do Rio Grande do Sul SA.

The state's government is considering selling all of the common shares it does not need to retain control of the bank, and could also sell preferred shares, Banrisul, as the bank is known, said in an Oct. 4 filing.

The lender did not disclose any additional details, including when the offering might take place. According to Reuters, the government owns a 56.97% stake in the company.

Rio Grande do Sul declared a state of financial calamity in November 2016 as Brazil's economic recession took a toll on the state's financing capacity and tax collection revenues.

In early 2017, reports surfaced claiming that the cash-strapped state would be forced to privatize the bank in order to reach a debt restructuring agreement with the federal government. However, that notion was later shot down by the bank's executives.