Telemar shareholders reject restructuring plan yet again

18 Dec 2006

Brazil’s largest fixed line telecoms service provider Telemar has failed in its final attempt to adopt a restructuring plan, after shareholders rejected the proposal on Friday. 36.94% of shareholders attending the meeting voted against the plan compared to just 29% in favour, frustrating many who thought the restructuring would be approved. Telemar’s shares have dipped 22% on the Sao Paulo Stock Exchange (Bovespa) as a result of the uncertainty over the company’s plans. The Telemar Group, comprising Telemar, Tele Norte Leste and Telemar Norte Leste, planned to de-list its shares and return to the shareholders a brand new company called Oi. However, some preferential shareholders baulked at the plans which they perceived would have weakened their shareholdings by returning ordinary shareholders 2.6 times more shares than preferential holders would receive. In the wake of the latest failure to push through the plans, Telemar CEO Luis Eduardo Falco said there was now no possibility of resurrecting the restructuring plan.

Brazil, Oi