Por­tu­gal Tele­com ap­proves sale of coun­try as­sets

The Pak Banker - - COMPANIES/BOSS -

Por­tu­gal Tele­com SGPS SA share­hold­ers ap­proved the 7.4 bil­lion-euro ($ 8.4 bil­lion) sale of Oi SA's Por­tuguese telecom­mu­ni­ca­tions as­sets to bil­lion­aire Pa­trick Drahi's Altice SA, paving the way for con­sol­i­da­tion in Brazil's phone mar­ket.

Por­tu­gal Tele­com is a mi­nor­ity in­vestor in Oi and its share­hold­ers had the right to block the sale, even though the Por­tuguese company doesn't con­trol the as­sets. Brazil's Oi gained the Por­tuguese as­sets in a merger with Por­tu­gal Tele­com.

"Oi is sat­is­fied with the out­come of the vote," Oi Chief Ex­ec­u­tive Of­fi­cer Ba­yard Gon­tijo told re­porters after the in­vestor meet­ing yes­ter­day in Lis­bon. "It's the best thing for both com­pa­nies.

It's the best thing for PT Por­tu­gal, which will con­tinue pro­vid­ing ser­vices of ex­cel­lence in Por­tu­gal, and for Oi to re­duce its lever­age." Oi's Amer­i­can de­posi­tary re­ceipts jumped 19 per­cent in New York trad­ing after the decision.

A clear­ance of the sale is cru­cial for more con­sol­i­da­tion in Brazil­ian telecom­mu­ni­ca­tions. Oi, Brazil's small­est wire­less car­rier, needs the pro­ceeds as it eval­u­ates a po­ten­tial bid for Tim Par­tic­i­pa­coes SA, the lo­cal wire­less provider con­trolled by Tele­com Italia SpA. At the same time, Tele­com Italia has been study­ing a ac­qui­si­tion of Oi us­ing Tim, peo­ple fa­mil­iar with the mat­ter have said.

Por­tu­gal Tele­com climbed 8.6 per­cent to 86 euro cents at 8:26 a.m. in Lis­bon, adding to a 24 per­cent ad­vance yes­ter­day. Tele­com Italia climbed 5.8 per­cent to 1.03 euros. Oi rose 20 per­cent to 6.77 reais in Sao Paulo yes­ter­day.

"Ap­prov­ing the sale of PT Por­tu­gal to Altice was the best out of the so­lu­tions that were on the ta­ble," Rafael Mora, vice chair­man at On­go­ing In­vest­ments SGPS SA, told re­porters after yes­ter­day's meet­ing. On­go­ing holds a 10 per­cent stake in Por­tu­gal Tele­com, ac­cord­ing to the phone company's web­site.

Oi and Por­tu­gal Tele­com agreed more than a year ago on their com­bi­na­tion. In July, the com­pa­nies rene­go­ti­ated the deal to give Por­tu­gal Tele­com a smaller stake in the com­bined en­tity after it emerged that the Por­tuguese company was hold­ing debt de­faulted by Grupo Espir­ito Santo's Rio­forte In­vest­ments SA.

Tele­com Italia's Tim unit has been study­ing a takeover of Oi to gain mar­ket share and com­pete with Tele­fon­ica Brasil SA and Amer­ica Movil SAB's Claro brand in Brazil.

Any de­lay with the Por­tuguese sale would po­ten­tially de­ter Tele­com Italia from mak­ing an of­fer, peo­ple fa­mil­iar with the mat­ter have said. That's be­cause Tele­com Italia is fo­cused on Brazil and has no any in­ter­est in gain­ing Oi's as­sets in Por­tu­gal, one of the peo­ple said.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.