(Bloomberg) -- Investors have signaled interest in scooping up more than 30 billion reais ($5.3 billion) worth of shares in Brazilian water utility Sabesp — far more than what’s available for sale — in what’s expected to be the largest Latin America equity offering this year, according to people familiar with the matter.

Money managers are poised to snap up, collectively, a 17% interest in Cia de Saneamento Basico do Estado de Sao Paulo, as the firm is formally known, and have already started submitting bids as they vie for a roughly 8 billion-real stake in the company, said the people, asking not to be named discussing private talks.

Brazilian power firm Equatorial Energia SA submitted a 6.9 billion-real proposal last week to buy a 15% stake in the tranche dedicated to strategic bidders, and should emerge as a key shareholder at Sabesp. Sao Paulo’s state government is selling a combined 32% stake, and will effectively give up control of the firm once the transaction takes place. 

Equatorial, which was the sole bidder among strategic investors, offered 67 reais per share — which represents roughly a 14% discount to current levels. Funds can bid at this price or below, but given the huge demand the deal will most likely be done at 67 reais.

Sabesp fell less than 1% to 77.85 reais at the close in Sao Paulo on Tuesday. Equatorial dropped 1.7% to 31.50 reais.

Both Sabesp and Sao Paulo’s state government declined to comment on demand for the offering.

The equity deal, which is fully secondary as there are no new shares being issued, is set to price on July 18. The offering could raise as much as 15 billion reais if the over-allotment is fully sold and based on the price proposed by Equatorial.

Equatorial has tapped Banco Bradesco SA as its financial adviser and is working on a 18-month bridge loan to help fund its bid, according to a presentation to investors. 

--With assistance from Barbara Nascimento.

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