Brazil’s telecom service provider, Tele Norte Leste Participacoes SA, or Oi, has entered into a deal to buy 60.5 per cent stake in Brasil Telecom for 5.9 billion Brazilian reals (BRL). In addition to a 60.5 per cent voting stake, Oi will make a voluntary public offer for up to one-third of Brasil Telecom’s preferred shares, and a mandatory tender offer for voting shares at 80 per cent of the offer price to controlling shareholders. In total, Oi will spend BRL12 billion on the purchase of stake. Oi will reportedly finance most of the deal through cash while raising capital from the market for the balance. The government-owned Brazilian Development Bank is reportedly extending Oi a credit line of BRL2.6 billion to help finance the deal. The deal is yet to be submitted for approval to Brazil’s regulator.
