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Report: Rio Grande do Sul must privatize Banrisul for debt restructuring deal

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Report: Rio Grande do Sul must privatize Banrisul for debt restructuring deal

The Brazilian state of Rio Grande do Sul's government will be forced to privatize state-run bank Banco do Estado do Rio Grande do Sul SA in order to reach a debt restructuring agreement with the federal government to resolve the state's financial woes, Valor Econômico reported, citing anonymous official sources.

According to the report, the federal government will only offer temporary financial relief to the state if it agrees to take its state-run bank, known as Banrisul, private. However, Rio Grande do Sul Governor José Ivo Sartori would have to surmount local political resistance to push ahead with such a privatization.

Rio Grande do Sul is one a handful of Brazilian states that declared a state of financial calamity in 2016, along with Rio de Janeiro and Minas Gerais.

Rio de Janeiro's government has agreed to privatize its sanitation company, Cedae, and will sign an agreement with the federal government Jan. 26. The state of Minas Gerais, however, said it will not negotiate with the federal government, the publication noted.