The Brazilian government could gain more than 3.7 billion reais from the sale of its common shares in reinsurer IRB-Brasil Resseguros SA.

In a decree published May 30, President Jair Bolsonaro included the federal government's stake in the company within the administration's privatization program. Development bank Banco Nacional de Desenvolvimento Econômico e Social will handle the sale of the government's 36,458,237 common shares in IRB or 11.7% of the company's shares.

The current value of the stake is about 3.7 billion reais, according to a report by Folha de S.Paulo. However, the final sale value will depend on market conditions.

The government has offered the IRB shares to leading private banks Banco Bradesco SA and Itaú Unibanco Holding SA, according to previous reports.

According to Valor Econômico, the most likely outcome will be a public offering of the stake, although it is not yet known whether the government will pair the share sale with Banco do Brasil SA's planned sale of IRB shares. The state-run lender owns 15.2% of the reinsurer, 13.5% of which is tied to a shareholder's agreement.

As of May 31, US$1 was equivalent to 3.91 Brazilian reais.