Brazilian operator Oi has launched a capital raise that would reach R$17.3bn (US$7.6bn) based on its current share price, and could amount to R$23.5bn (US$10.3bn) if certain options are exercised.
The issue comes as part of its merger with Portugal…
Brazilian operator Oi has launched a capital raise that would reach R$17.3bn (US$7.6bn) based on its current share price, and could amount to R$23.5bn (US$10.3bn) if certain options are exercised.
The issue comes as part of its merger with Portugal Telecom to raise funds for, and cut debt from, the soon-to-be combined entity.
The shares, split between common and preferred stock, are set to be priced on 28 April and start trading on 30 April. Oi plans to initially offer 1.9 million common shares and 3.8 million preferred shares, totalling 5.7 million shares.
That number can be increased by 15%, should the lead coordinator decide to exercise its over-allotment option.
Oi also has the option to increase the number of shares being issued. It can activate a hot issue, providing the global coordinators and underwriters consent, and issue a further 20% in shares.
This means the offering could potentially see 7.7 million new shares issued, split between common and preferred stock.
BTG Pactual is leading a syndicate which has committed to underwrite the offering. The other global coordinators are BofA Merrill Lynch, Barclays, Citigroup, Credit Suisse, Espirito Santo and HSBC.
A tier below those banks lie coordinators Banco do Brasil, Banco Bradesco, Caixa GD, Goldman Sachs, Itau Unibanco, Morgan Stanley and Santander.
The issuance was suspended by Brazil’s securities commission at the end of last week due to public comments made to the media by the Brazilian operator’s CEO, Zeinal Bava, which the regulator said were prohibited at that point in the process.
However, this week the CVM gave Oi the green light to proceed with the offering.
