The shareholders of Portugal Telecom SGPS have agreed to delay yesterday’s planned meeting until 22 January, according to a company statement.
The meeting, which had been called to vote on Oi’s €7.4bn sale of incumbent PT Portugal to telecoms…
The shareholders of Portugal Telecom SGPS have agreed to delay yesterday’s planned meeting until 22 January, according to a company statement.
The meeting, which had been called to vote on Oi’s €7.4bn sale of incumbent PT Portugal to telecoms group Altice, was postponed after Portuguese market regulator the CMVM requested PT SGPS to provide more information to its shareholders.
PT workers’ union, which is a shareholder in PT SGPS, as well as the chairman of PT SGPS general assembly, Antonio Menezes Cordeiro, also reportedly asked to call off the meeting.
On Monday, PT SGPS, which owns just over 25% of Brazilian telco Oi, said it had provided shareholders with all the information required, adding that it had also sent the watchdog “complementary information to support the proposal and preparatory information granted to the shareholders prior to the general meeting.”
After PT SGPS’ shareholders decided to delay the meeting, Oi issued a statement saying that it supported the suspension “as part of the company’s permanent commitment to provide information that the regulators deem necessary, in order to allow a correct and accurate evaluation by the investors”.
Portugal-based analysts told TelecomFinance that the regulator wanted PT SGPS shareholders to have more time to review a recent PwC report on investments made by the Portuguese operator in Rioforte, a unit of collapsed banking group Banco Espirito Santo (BES).
The merger between Oi and PT SGPS, first announced in October 2013, soured in July 2014 after Rioforte defaulted on a €900m debt payment to the Portuguese operator. Oi claimed it was unaware of the investment, forcing PT SGPS to reduce its stake in the combined entity from 37.4% to 25.6%.
However, the independent analysis carried out by PwC quoted Amilcar Morais Pires, the former CFO of BES, as saying that a meeting held on 26 March 2014 about investments in commercial paper issued by Rioforte was held at the request of Ricardo Salgado, former president and founder of BES.
According to PwC, Pires added that “Salgado had stated that everything regarding this matter, in its essentials, had already been agreed among himself, [the former chairman and CEO of PT SPGS] Henrique Granadeiro, and [the former CEO of Oi] Zeinal Bava.”
In response to the PwC report, Oi said that it will request clarifications from Bava, reiterating that “it was neither informed nor participated in the decisions related to the investments made in Rioforte, which were implemented prior to the subscription and payment of the capital of Oi by PT SGPS, which occurred in late April and early May 2014, respectively”.
Portuguese media cited a letter by Granadeiro in August, following his resignation, as saying he was sure the independent analysis would prove he always acted in the best interests of PT SGPS and its stakeholders.
Although a number of parties have proposed to unwind the ill-fated combination between Oi and PT SGPS, which was initially aimed at creating a leading telecoms player for the Portuguese-speaking countries, an analyst argued that it would be a very difficult process to achieve given the complexity of the deal initially agreed.
In his view, PT SGPS shareholders might instead seek to increase their stake in Oi, if it is established that the Rio de Janeiro-based telco was aware of the Rioforte investments, meaning that the revision of the merger terms should have not taken place.
Separately, earlier today, a Reuters report suggested that, following the delayed vote on the sale of PT Portugal, Altice had to push back its planned €5.7bn high-yield bond issue to finance the deal.
