Federal bank to provide USD1.44bn loan for Oi restructuring

11 Feb 2008

Brazil’s federal development bank Banco Nacional de Desenvolvimento Economico e Social (BNDES) is to provide financing worth BRL2.55 billion (USD1.44 billion) to aid Oi’s restructuring plans as it looks to bid for rival mobile operator Brasil Telecom (BrT), writes BNamericas citing a report in local newspaper Valor Economico. In what is being cited as an ‘unprecedented’ move, Oi has secured terms to repay the loan according to the market valuation of the stock of the new enlarged company once it completes its takeover of BrT. BNDES is offering BRL1.25 billion to Oi shareholders

Andrade Gutierrez and La Fonte, enabling them to buy out a number of other shareholders including GP Investimentos and Banco do Brasil insurance. Meanwhile, BRL1.3 billion will be used by Oi’s parent group, Telemar Participacoes, to allow it to complete its capital restructuring exercise. Upon completion of the transfers and restructuring, Andrade Gutierrez and La Fonte will each control 20% of Telemar Participacoes’ capital.

Brazil, Brasil Telecom (BrT), Oi