Oi has been given the green light to commence a rights issue connected to its merger with Portugal Telecom after Brazil’s securities commission revoked a suspension it imposed on the offering.
Last week the CVM halted the proposed capital raise –…
Oi has been given the green light to commence a rights issue connected to its merger with Portugal Telecom after Brazil’s securities commission revoked a suspension it imposed on the offering.
Last week the CVM halted the proposed capital raise – which could be worth R$14bn (US$6.1bn) – citing public comments made to the media by the Brazilian operator’s CEO, Zeinal Bava, which it said are prohibited at this point in the process.
The offering of new shares was approved by investors last week, in spite of protests from minority shareholders.
The capital raise is set to be priced on 16 April and close on 23 April. A road show to market the new shares is due to touch down in the US, Chile, Canada, France and Germany, according to local media.
Previous it had been suggested that 14 banks have committed to take part in the offering, however earlier this week it was reported that four of that number were having second thoughts due to some of the details of the offering changing following a request from the CVM.
The banks, led by BTG Pactual, are set to underwrite R$6bn (US$2.65bn) of the total rights issue. Bradesco, Citigroup, Goldman Sachs and Itau were reported to be having second thoughts.
Details share offering
Oi’s board approved how many shares the company will issue at a meeting held yesterday.
It 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 rights issue could potentially see 7.7 million new shares issued, split between common and preferred stock.
The merger will help to reduce Oi’s debt pile, which stood at R$30.4bn (US$13.4bn) at the end of 2013.
As part of its cost-cutting efforts it closed the sale of more than 2,000 towers to US towerco SBA Communications yesterday for R$1.53bn (US$671m).
