Brazilian holding company TIM Participacoes is to make an offering of over 190m common shares to be distributed both in Brazil and overseas.
In a statement yesterday, the company said that it would be issuing 190,796,858 common shares.
The number of…
Brazilian holding company TIM Participacoes is to make an offering of over 190m common shares to be distributed both in Brazil and overseas.
In a statement yesterday, the company said that it would be issuing 190,796,858 common shares.
The number of shares in the offering, apart from those allocated to the company’s controlling shareholder Telecom Italia, can be increased by 15%. This is designed to cope with any excess demand for the offering.
TIM Participacoes did not give a price for the shares to be offered.
In its statement, it said that the price would be determined “having as a parameter” the price of the shares held by the company on the Sao Paolo stock exchange, the price of its American Depositary Shares on the NYSE and the results of the bookbuilding process.
The offer is being coordinated by Banco Itau BBA and Morgan Stanley.
In a separate document showing the minutes of a board meeting yesterday, TIM Participacoes said that its choice of criteria for determining the price per share was justified because it would not lead to “unjustified dilution” of the company’s shareholders.
The risk of dilution was also addressed in a separate statement today by Italian incumbent Telecom Italia, which indirectly holds a 67% stake in TIM Participacoes.
Telecom Italia said: “The Group does not intend to dilute its presence in the Brazilian market.”
It confirmed its intention to underwrite a pro-quota stake of 66.94% of the planned share offering.
Telecom Italia said that the capital increase was designed to help fund the development and expansion of the fixed and mobile network infrastructure in Brazil. It would also be used to help fund TIM Participacoes’s R$1.6bn acquisition of the fibre optics company AES Atimus. This deal is expected to close in Q4 2011.
“By backing the operation Telecom Italia confirms Brazil’s strategic role as a core market for the Group,” Telecom Italia said in its statement.
Telecom Italia currently holds a 100% stake in the holding company TIM Brasil, which in turn holds a 67% stake in TIM Participacoes.
TIM Participacoes controls the mobile operator TIM Celular and the fixed-line operator Intelig.
