Brazilian telco Oi is unlikely to be able to keep Unitel, the Angolan unit that forms the largest part of African business Africatel, according to a person close to the company.
This runs in contrast to recent comments by Oi CEO Bayard Gontijo, who was…
Brazilian telco Oi is unlikely to be able to keep Unitel, the Angolan unit that forms the largest part of African business Africatel, according to a person close to the company.
This runs in contrast to recent comments by Oi CEO Bayard Gontijo, who was recently quoted saying that the telco may now opt to keep its 25% stake in Unitel. Oi inherited the group as part of its ill-fated merger with Portugal Telecom.
Oi will eventually have to sell its 25% stake in Unitel to fellow shareholder Isabel dos Santos, the daughter of Angolan president Jose Eduardo dos Santos, who holds the remaining shares together with state-owned oil company Sonangol.
Admitting that selling the asset was still on the cards, Gontijo told Reuters that a second option was to fix “those old disputes…in a structure where we have the shareholders’ agreement respected by both sides.”
In a separate interview with Bloomberg, Gontijo said that without a sale, his company would continue to receive annual dividends, “which is not bad for us. This is a company that generates cash.”
However, according to the person close to the company, “PT has been trying to get the dividends for three years, but the Angolan government did not allow the funds to be expatriated. Oi might generate the dividends on paper, but they will not be transferred to the company’s account unless it reaches a settlement with dos Santos through political intervention”.
Brazilian state development bank BNDES, a major shareholder and creditor of Oi, has strong relationships in Angola.
The person explained that Oi, which is advised by Brazilian bank BTG Pactual, has so far failed to find suitors for the asset due to these legal disputes and the fact that a 25% stake would not give the prospective buyer operational control.
“The natural buyer for the asset is Isabel dos Santos. The most likely scenario is that she pays Oi the dividends and a few thousand euros in return for the Unitel stake,” the person said.
Talks between the parties have stalled over valuation. Oi would like to receive between €1bn and €1.5bn euros for the asset, which is the value estimated by Banco Santander when the PT merger was first agreed, while Dos Santos would like to acquire the stake at a €300-400m book value.
