Brazilian telco Tele Norte Leste Participacoes or Oi announced on Friday that its board has approved the issue of new shares worth a total of over R$12bn (US$7.2bn).
The company said it will issue up to 126.2 million new common shares at a price of…
Brazilian telco Tele Norte Leste Participacoes or Oi announced on Friday that its board has approved the issue of new shares worth a total of over R$12bn (US$7.2bn).
The company said it will issue up to 126.2 million new common shares at a price of R$38.55 a share.
Up to 252.4 million new preferred shares will be issued at R$28.27 a share.
The announcement was made in a note to shareholders in the company after a meeting of the board on Thursday.
In the note, Oi also said that one of its major shareholders, Telemar Participacoes, will buy a minimum of R$1.36bn worth in new shares. Depending on how many shares are bought by minority shareholders, it may buy up to R$2.25bn worth of new shares.
Telemar Participacoes currently holds 53.69% of the voting rights of the company and 17.90% of the total capital (excluding treasury shares).
Oi said that the sale of new shares was planned to strengthen Oi’s subsidiary Telemar Norte Leste, given the current opportunities in the telecoms market in Brazil.
It will reduce its net debt and help to fund international expansion.
Oi also said that it is within the strategic partnership between itself and Portugal Telecom (PT) to create a global telecoms giant looking to expand its international presence, especially in Latin America and Africa.
PT announced in late January that it had agreed to buy a minimum 22.38% direct and indirect stake in Oi for R$8.2bn (US$).
The deal had been signed originally in July 2010. PT said that it expected the deal to close in March.
PT also said that Oi had indicated its “intention” to acquire a 10% stake in PT.
The deal means that PT will once again have a significant presence in the Brazilian market, having sold its 50% stake in Vivo’s holding company JV, Brasilcel, to Telefonica for E7.5bn in 2010.
