Telemar to sell USD2.3bn of bonds to fund BrT purchase, paper says

16 Jan 2008

Brazilian telecoms group Telemar Participacoes, which markets services under the Oi banner, is looking to sell around BRL4 billion (USD2.3 billion) worth of four-year bonds on the domestic market to help fund its proposed takeover of rival operator Brasil Telecom (BrT), writes Bloomberg citing local newspaper Folha de S. Paulo. Telemar plans to pay BRL4.8 billion to acquire control of BrT, and will offer a further BRL3.6 billion to buy out its minority shareholders, Folha said without citing sources.

It is understood that Brazil’s state development bank BNDES will have first rights to buy control of Telemar once the acquisition of BrT is completed. Two Brazilian firms, Andrade Gutierrez and La Fonte Participacoes, will control 51% of Telemar after the acquisition, Folha said. They plan to purchase new Telemar shares and are looking for up to USD1.2 billion in loans from BNDES to finance the deal. The paper went on to say that BNDES will have 15% of Telemar after the acquisition of BrT.

Brazil, Brasil Telecom (BrT), Oi