Companhia de Saneamento Básico do Estado de São
- SABESP (
), a leading provider of basic and environmental sanitation
services based in Brazil, kept its shareholders and other
interested parties informed about the latest minutes and updates
of the meeting held on January 10, 2013.
At the meeting, the board of directors approved the change in
the number of common shares comprising the NYSE traded American
Depository Receipts (ADRs). The company's ADR currently comprises
two common shares per ADR, which are to be reduced to one common
share per ADR. The company's Depositary Institution in the United
Bank of New York Mellon
), will issue the new ADRs which will be distributed among the
existing ADR holders. As a result of the change, the earnings per
ADR will go down.
Also, it was decided at the meeting to split the company's
common shares in a proportion to be announced later. Upon
subsequent shareholder approval, the total capital stock of the
company will change, depending on the proportion decided
Exiting the third quarter of 2012, the company had total
outstanding shares of 227.8 million. The company had cash and
cash equivalents of R$1.8 billion. However, the company's
long-term debt was much higher at R$7.1 billion.
The company is one of the largest water and sewage service
providers in the world, based on the number of customers. The
stock currently holds a Zacks Rank #5 (Strong Sell). Not all
utility-water supply stocks are performing as poorly as SABESP;
the company's competitors like
Connecticut Water Service, Inc.
American Water Works Company, Inc.
) hold a Zacks Rank #1 (Strong Buy) and a Zacks Rank #2 (Buy),
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