By Luciana Magalhaes and Jeffrey T. Lewis
SÃO PAULO--Brazil's government is considering a possible initial
public offering of shares in the insurance company controlled by
state-owned bank Caixa Econômica Federal and French insurer CNP
Assurances, Finance Minister Joaquim Levy told reporters on
Wednesday in Brasília.
It wasn't immediately clear how the IPO and resulting
shareholdings would be structured. According to Mr. Levy and
Caixa's chief executive officer, Miriam Belchior, who was also
present, the government is starting the preparatory phase for the
possible share offering. All parties involved, including the French
partner, will be consulted about the plan, they said.
CNP had no immediate comment on the Brazilian move.
The minister said the government will follow normal steps for an
IPO and could conclude the viability study for the offering by the
end of this year.
Caixa Econômica Federal holds a 48.21% stake in the unit, Caixa
Seguradora, while CNP Assurances owns 50.75% of the shares.
Just two years ago, Banco do Brasil, the country's largest
government-run bank, raised 11.5 billion reais ($3.72 billion) from
the spinoff of its pension and insurance unit, BB Seguridade. That
share sale was the largest in the world in 2013.
BB Seguridade's offer would serve as a reference for an IPO of
Caixa's insurance unit, according to Mr. Levy.
Caixa is one of Brazil's largest banks by assets and the
nation's top issuer of home loans. Raising new capital through a
share sale would strengthen Caixa and benefit insurance buyers in
Brazil, according to the Finance Minister.
"Insurance activity has a direct relation with income level of
the countries," Mr. Levy said. "As in many other areas, Brazil is
transforming itself" in the insurance market.
Brazilian President Dilma Rousseff said in late 2014 that the
government was considering an IPO for Caixa Econômica Federal at
some point in the future, but the plans didn't go ahead. Caixa's
CEO on Wednesday said the bank will continue to be entirely owned
by the government.
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