BRK Ambiental Participações, which had begun preliminary talks for an initial public offering (IPO), is considering delaying its debut due to deteriorating market conditions, according to people familiar with the matter.
The company is one of the largest sanitation concessionaires in Brazil, serving around 16 million people in more than 100 municipalities. BRK is controlled by Brookfield Asset Management and FI-FGTS and was aiming to raise around R$4 billion (US$768 million) in the offering, said the people who were not authorized to speak publicly.
Among the obstacles to the IPO are a sell-off in global markets amid rising tensions in the Middle East, as well as company-specific issues following its recent victory in a concession auction in the state of Pernambuco, the sources said.
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BRK stated that there are no changes to its strategy or preparations for the IPO. The company told Bloomberg that it continues to negotiate with the market, taking into account macroeconomic conditions, among other factors.
Investors were anxiously awaiting Brazil’s first initial public offering of shares since 2021, with the expectation that the Central Bank would begin monetary easing in March. But after a good start to the year, the Ibovespa index fell 5% last week, its worst week since 2022. Stock markets around the world have been affected by investor concern about the war in Iran and the impact of rising oil prices on inflation.
“In Brazil, investors were planning to launch offers at the end of the first or second quarter of 2026, after the start of the rate cutting cycle and before the elections became the main focus. However, the conflict in Iran may end up closing this window of opportunity before the elections,” said Fernando Siqueira, head of research at Eleven Financial. General elections in Brazil will be held in October.
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The conflict in the Middle East has impacted some bets on interest rate cuts in Brazil, with investors reducing expectations amid fears of rising inflation. Although the market generally expects the monetary authority to begin its easing cycle next week, money markets are now betting on a 25 basis point cut from Monday.
Recently, the shares of two Brazilian companies fell after going public in the US, amid fluctuations in investor appetite and market turmoil. PicPay, a mobile banking app controlled by the Batista family’s investment holding company, fell 26% by Friday’s close, while shares of AGI — known as Agibank — have fallen more than 12% since its IPO.
Rival Aegea Saneamento e Participações continues to engage with investors on a potential share sale that could take place by mid-year, potentially alongside the privatization of Minas Gerais state water supply company Companhia de Saneamento de Minas Gerais, known as Copasa, according to people familiar with the matter.
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