Brookfield, CPPIB mull bid for Oi unit
Part of Brazil’s biggest land line carrier
Brookfield Asset Management Inc. and the Canada Pension Plan Investment Board are mulling a bid for the fibre unit of Brazilian telecom firm Oi SA, according to two people familiar with the matter.
The unit, called InfraCo, has also attracted interest from Highline do Brasil II Infraestrutura de Telecomunicacoes, Digital Colony’s local unit, the people said, asking not to be identified because the discussions aren’t public. Oi is planning to sell as much as 51 per cent of the subsidiary’s shares and has scheduled an auction in the first half of next year, according to a company presentation. A private equity fund managed by a unit of Banco BTG Pactual SA has presented a non-binding bid for the asset as well, according to a July 28 regulatory filing.
Oi, Brookfield, Digital Colony, CPPIB, and Highline declined to comment. BTG declined to comment beyond the statement.
Oi, which is Brazil’s biggest land line carrier, has been carrying out a major restructuring since emerging from bankruptcy protection in 2018. The carrier, which posted losses of 6.28 billion reais (US$1.19 billion) in the first quarter, proposed in June segregating assets into four units — a plan that creditors still need to approve, in a meeting that could happen this month, Oi said. The telecom operator wants to sell most of the assets for a minimum of 22.8 billion reais. The Infraco deal could fetch at least 13 billion reais if a 51 per cent stake is sold, according to Oi’s press office.
Digital Colony, an arm of Tom Barrack’s Colony Capital Inc., is also vying for Oi’s mobile- phone unit. The surprise proposal fuelled a bidding war for the assets, which local units of Telefonica SA, Telecom Italia SPA and America Movil SAB are trying to scoop up with a joint offer. Highline do Brasil also made a binding offer worth 1.08 billion reais for Oi’s tower unit, according to a regulatory filing on July 18.
CPPIB, Canada’s largest pension fund, has long invested heavily in hard assets such as office towers. Its Chief Executive Officer Mark Machin said in May that other real estate such as data centres and warehouses have been buoyed by the e-commerce trend in the pandemic and will probably continue to thrive.