Court Clears Path for Sabesp’s Takeover of Emae After Debt Default

Overview

• Sabesp signed a contract to acquire about 70.1% of Emae from debenture holders represented by Vórtx.
• Judge Adler Batista Oliveira Nobre denied Phoenix’s request to halt the operation and to suspend the debenture liquidation for 60 days, criticizing the move as an improper use of the courts.
• Vórtx notified Emae and obtained an injunction ordering Emae and Phoenix to refrain from atypical or related-party transactions that conflict with governing documents.
• A missed interest payment due on September 27 led to acceleration on September 30, transferring the stake held by Nelson Tanure and partner Tércio Borlenghi to the bondholders and enabling the offer to Sabesp.
• Fitch Ratings said the potential acquisition would not weaken Sabesp’s credit quality and could bolster both Sabesp’s business resilience and Emae’s financial flexibility.