Banco Opportunity members expelled from Telemig/Tele Norte Celular boards

22 Mar 2006

A Brazilian court has ousted representatives from Banco Opportunity from the management and boards of domestic mobile operators Telemig Celular Participacoes and Tele Norte Celular Participacoes (Amazonia Celular), and given the cellcos’ controllers, Citigroup and two local pension funds, permission to appoint new boards and management teams. Monday’s ruling by the Federal Appeals Court is the latest in a series of ongoing battles between Citigroup and the pension funds, and Banco Opportunity. In October 2005 Banco Opportunity was removed from the management of the country’s fourth largest fixed line operator Brasil Telecom. The group was the administrator of CVC, which controlled Telemig Celular Participacoes and Tele Norte Celular Participacoes, but Citigroup split from Banco Opportunity in March 2005.

Since then, Opportunity has retained its grip on the two mobile operators through the courts, arguing that the pension funds should not participate in administration proceedings as they also had interests in Tele Norte Leste Participacoes (Telemar), which runs the rival TNS PCS (Oi) wireless service. However, the funds have already withdrawn from Telemar’s management and the Federal Appeals Court ruled on Monday that there is no conflict of interest.

It is understood that once the battle is won, the owners will look to sell Telemig Celular Participacoes and Tele Norte Celular Participacoes (Amazonia Celular), with Mexican-backed Telecom Americas (Claro) unit and Vivo, a joint venture of Spain’s Telefónica and Portugal Telecom being touted as possible buyers.