SABESP Has Delayed in Filing Its Annual Report on Form 20-F for the Fiscal Year Ended December 31, 2008
do Estado de
“Registrant”) respectfully notifies the Securities and Exchange Commission
that it will not be able to timely file its annual report on Form 20-F for the
fiscal year ended
Since the end of first quarter of 2008, the Registrant and the
Sao Paulo
discussions to settle the outstanding debt owed by the State to the Registrant
in respect of supplemental retirement and pension benefits (the “Benefits”)
that the Registrant paid from
State to the former employees of the State-owned companies which merged to
form the Registrant.
On
agreement to settle the outstanding debt relating to the Benefits. Pursuant
to the agreement, the State acknowledges a portion of the outstanding debt, in
the amount of
pay the Registrant through (i) the transfer of certain reservoirs to the
Registrant, with an aggregate value of
successive monthly installments, in the aggregate amount of
as adjusted by inflation, plus annual interest accruing at the rate of 6%,
beginning in
Despite the agreement, a portion of the outstanding debt owed by the State
to the Registrant remains unsettled, totaling
does not include certain applicable adjustments) as of
“Unsettled Amount”), because of divergent interpretations between the
Registrant and the Public Attorney’s Office of the
“Public Attorney’s Office”) relating to the calculation and eligibility
criteria applicable to the Benefits. The State will not be able to finalize
the discussions with the Registrant and enter into an agreement regarding the
Unsettled Amount until the Public Attorney’s Office issues a final
interpretation of the calculation and eligibility criteria applicable to the
Benefits.
Based on opinions of external legal and accounting advisors, management
believes that the Unsettled Amount is due to the Registrant by the State.
Accordingly, the Registrant has not made any provisions for losses relating to
the Unsettled Amount in the statement of income for the fiscal year ended
The Registrant’s independent auditors disagreed with management and issued a
qualified report for the fiscal year ended
filed the financial statements for the fiscal year ended
containing the Registrant’s independent auditors’ qualified report, with the
Brazilian Securities Commission (Comissao de Valores Mobiliarios) on
2009
report on Form 6-K on
independent auditors and management does not affect the reconciliation of the
financial statements prepared under Brazilian GAAP to U.S. GAAP, since under
U.S. GAAP the Registrant has already made provisions for losses relating to
the Unsettled Amount in the statement of income for the fiscal year ended
Once the Public Attorney’s Office issues a final interpretation of the
calculation and eligibility criteria applicable to the Benefits and the
Registrant is able to finalize the discussions with the State and reach an
agreement regarding the Unsettled Amount, the Registrant expects that its
Registrant’s independent auditors will have new facts to review the
qualification in their report for the fiscal year ended
However, the Registrant cannot assure that based on the new facts the
Registrant’s independent auditors will be able to issue a report without the
qualification for the fiscal year ended
The Public Attorney’s Office has recently informed the Registrant that it
expects to issue a final interpretation of the calculation and eligibility
criteria applicable to the Benefits by the end of
believes that, after it is able to finalize the discussions with the State and
reach an agreement regarding the Unsettled Amount, the Registrant will need
additional work and time to restate its financial statements for the fiscal
year ended
In light of the above, the Registrant is unable to timely file its annual
report on Form 20-F for the fiscal year ended
at this stage, the Registrant is not in a position to determine when it will
be able to file its 2008 annual report on Form 20-F for the fiscal year ended
Significant change to Registrant’s net income
The Registrant anticipates that there may be a significant change in the
Registrant’s results of operations for the fiscal year ended
if the State does not acknowledge that it owes to the Registrant the Unsettled
Amount or a portion thereof. In this case, the Registrant may make provisions
for losses accordingly in the statement of income for the fiscal year ended
which may cause a significant change in the Registrant’s net income for the
fiscal year ended
The State will not be able to enter into an agreement with the Registrant
regarding the Unsettled Amount until the Public Attorney’s Office issues a
final interpretation of the calculation and eligibility criteria applicable to
the Benefits. Thus, at this stage, the Registrant does not know if it will
reach an agreement with the State regarding the Unsettled Amount or a portion
thereof and, as a result, if any provision for losses will be made
accordingly. Therefore, the Registrant is not in a position to make a
reasonable estimate of the significant change in the Registrant’s net income,
if any. The Public Attorney’s Office has recently informed the Registrant
that it expects to issue a final interpretation of the calculation and
eligibility criteria applicable to the Benefits by the end of
IR Contact:
maasampaio@sabesp.com.br)
abairoldi@sabesp.com.br)
SOURCE SABESP