Valuation: Departamento de Água e Esgoto de Santana do Livramento - RS

Abstract

Brazil is currently undergoing structural changes in the regulation of the basic sanitation sector. In 2020, the new legal framework was updated, bringing provisions in regard to new targets aiming the universalization of sanitation as well as new investments to achieve these goals. This directly affects all companies in the sector, which will have to adapt to the new rules in order to remain in the market. Therefore, these companies will have to seek new sources of investment to keep up with the new national sanitation scenario. Therewith, the interest and need to evaluate companies and discover their fair value arises, as well as other indicators that place them in the face of the new impositions. To achieve its goal, this study has as its main objective to carry out the valuation of the sanitation company of the town of Santana do Livramento, through the Discounted Cash Flow model. Additionally, this study also uses the Decree No. 10.710/2021, which establishes the methodology to be used in order to prove the economic and financial capacity of public service providers of drinking water supply or sanitary sewage, to assess the possible impact of the new regulation on the company. It also analyzes the results under the light of quantitative and qualitative approaches.