Brazil redrafts LOTEX sale lowering tender expectations

Having failed five times to sanction the sale of state-owned instant win (scratch card) operator LOTEX, the Brazilian government has drafted new tender documents and concession criteria as it re-establishes efforts to sell the state asset.

Announced last week, Brazil’s Ministry of Finance has launched a new tender submission deadline, open until 17 October, with LOTEX’s official auction scheduled for 22 October.

Brazil’s much-maligned national development bank BNDES maintains the responsibility of organising LOTEX’s sale, seeking to fulfil the government’s ‘Partnerships & Investment Program – PPI’ privatization directive, initiated by the previous Michel Temer government.

Brazilian business news sources report that the government has significantly lowered its expectations on the sale of LOTEX, seeking a minimum purchase price of $545 million to operate its 15-year concession.

Managing expectations, the government has instructed BNDES to lower a number of qualifying criteria for the concession of operating LOTEX seeking to attract foreign operators to its tender process.

Guidelines published in the government’s gazette reveal that BNDES has lowered requirements on licence fee payments, operator experience and payment instalments.

Lowering qualifying criteria, candidates must be able to demonstrate having operated an instant lottery business (retail-or-online) generating $135 million over a 12-month period. In addition, the government doubles the number of payment instalments from four to eight for the winning party.

In previous updates, Brazilian business news sources have underlined the importance of successful LOTEX sale, as in-debted CAIXA seeks to raise BRL $100 billion (€22 billion) selling its assets and equity in state-owned investments.

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