(Bloomberg) -- Brazil auctioned off $4.2 billion worth of assets from the waterworks that serve the state of Rio de Janeiro, notching a symbolic victory for the embattled reform agenda of President Jair Bolsonaro.
Bolsonaro personally attended the auction held at Sao Paulo's stock exchange with Economy Minister Paulo Guedes, who hailed the sale as a vote of confidence by investors.
“They believe in Brazil,” he said.
The sale boosts the coffers of Rio state and potentially the free-market bona fides of Bolsonaro, who's struggling to maintain support with business leaders and regular Brazilians alike for his erratic response to Covid-19. The former army captain rose to power lambasting the spendthrift policies of past administrations, and recruited Guedes, a University of Chicago-trained economist to oversee privatizations and deregulation to jumpstart growth.
But many investors have lost faith as reforms have stalled amid political infighting and Bolsonaro's own populist tilt. Meanwhile, the pandemic has raged, claiming over 400,000 lives and undercutting economic recovery.
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Before the auction kicked off, protesters greeted the officials' arrival with shouts of “Bolsonaro out,” and “genocide,” in reference to the pandemic's rising death toll.
After years of legal disputes, the government split Cedae and the rights to provide water and sewage services to some 13 million Brazilians into four blocks to be auctioned off to the private sector. Three were sold at Friday's auction at a markup of over 100%, the government said. The remaining block received no bids.
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