Private capital will enter the company through a transference of 90% of its state-owned shares

The government announced on Friday that it will begin the process of privatizing state-run water and sanitation company AySA (Spanish acronym for Argentine Waters and Sanitation). “Private capitals will step in through the transfer of 90% of the company’s shares, which are currently owned by the state,” presidential spokesperson Manuel Adorni said.

The privatization will take place “through a hybrid scheme that combines the selection of a strategic operator through a local and international public bidding process, and an initial public offering to open the company’s capital to other investors,” he explained.

Adorni also said that the plan foresees employees continuing as shareholders of AySA within the company’s current equity ownership program, which represents 10% of its share capital.

The process will be regulated by the National Securities Commission, and it will be aligned with “the highest national and international standards” to guarantee the transfer.

Reasons to privatize AySA

According to Adorni, the decision to privatize the service is based on the fact that “ever since its re-nationalization in 2006, AySA has required constant funding from the Treasury, totaling US$13.4 billion until 2023.”

“In this sense, some key indicators show that there was a serious deterioration of the company’s infrastructure and operational costs. For example, staffing grew by 90% during the state-run administration, and user arrears reached 16%, when the average used to be 4%,” he added.

Adorni also described the figures they received when taking office, and said the government found that AySA spent more than US$4.8 billion in the last administration. The spokesman added that the company operated “as a campaign platform,” with US$200 million assigned to public works, and that 25% of that was allocated in Tigre and Malvinas Argentinas, two cities “where its directors came from.”

Privatization, Adorni said, will allow for the “modernization” of the sector and “an improvement” in the price and quality of the service.

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