GVT abandons plans for secondary share offering

29 Jun 2006

Brazilian telecoms operator Global Village Telecom (GVT) has called off its planned secondary share offering, according to BNamericas citing Brazilian news service Valor Online. The Curitiba-based company will instead issue only a primary offering and has opted not to offer shares owned by its current controlling shareholders, Discount Bank and Europe’s Magnum Group. No reason was given for the decision.

According to TeleGeography’s GlobalComms database, GVT won its mirror licence to start competing with wireline incumbent Tele Centro Sul (Telesp) in Region II in September 1999, later than its fellow mirror licence holders. Under the terms of its award it was required to install 1.34 million lines by 2003 and swifly set about launching equipment tenders to find suppliers to help it to deploy 230,000 lines in 2000, 450,000 in 2001 and 660,000 in 2002. Having fulfilled the terms of its concession, it was allowed to enter the national long-distance and international sectors in March 2003, and later that month signed an agreement with VoIP services provider IXTC, enabling it to access the operator’s global IP network.

In April 2006 GVT announced that it would use the proceeds of its upcoming IPO to pay off debts, finance its network expansion, and increase capital. 60% of the money raised will be used to pay off loans, while a further 26% is being set aside to increase the coverage of its fixed line network. GVT has around a million fixed lines in service and is investing USD93 million in 2006 to sustain its 30% annual growth rate. Its strategy is to increase its customer base by offering bundled services that include voice, broadband internet access, VoIP and corporate solutions.

Brazil, Global Village Telecom (GVT)