Oi “sounding out the market” for potential sale of mobile business
Brazilian telecommunications operators Telefonica Brasil and TIM Participações have expressed interest in negotiating a joint offer to buy the mobile business of bankrupt Brazilian telco Oi the two companies said in securities filings.
Telefonica Brazil is fully owned by Spanish giant Telefonica, while TIM Participações is controlled by Italian telecom group Telecom Italia.
The two carriers informed Oi’s financial advisor Bank of America Merrill Lynch of their interest in starting negotiations for a potential acquisition of all or part of Oi’s mobile division.
A deal would see Oi’s mobile business split between the two interested carriers, according to the filings.
TIM Participacoes stated in a filing that the move would accelerate its growth, increase operational efficiency and improve quality of services.
Oi said in a separate filing that the move, which it described as “sounding out the market,” showed that there was market interest in its mobile business. Oi also said it continued to analyse existing alternatives which might maximize the outcome of its strategic plan.
In September, Reuters reported that Oi was in talks with the two firms to sell assets and avoid insolvency.
Executives from all three major carriers in Brazil – Telefonica Brasil, TIM and America Movil’ Claro – said at the time they could consider a deal with Oi.
During a previous earnings call, America Movil’s CEO Daniel Hajj had confirmed that América Móvil was interested in Brazilian telecom operator Oi and that it was open for discussions for a potential transaction.
“There’s a lot of rumors that Oi is for sale. Some of them are that some assets are going to be for sale, others that they are going to sell it totally or they’re going to mix it. Of course we are interested in doing something with Oi in Brazil and we are open to discuss anything that will be.”
In September last year, Chinese vendor Huawei said it was not interested in acquiring Oi or any other Brazilian carrier following a report published by Brazilian newspaper O Globo which had reported that Huawei was joining forces with China Mobile to potentially enter a dispute to buy Oi.
Oi is struggling to recover since it filed for bankruptcy protection in June 2016. In August this year, local press reports said that the Brazilian government was considering to intervene the troubled telco.
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