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Embratel jumps on the corporate restructuring bandwagon

7 Mar 2012

Brazilian telecoms group Embratel Participacoes yesterday revealed plans to embark on a major corporate restructuring exercise which could ultimately result in its various business operations being brought under one roof. As part of the reorganisation plan, Embratel, which is controlled by Mexican regional telecoms group America Movil (AM), is looking to vacuum up the shares in local cableco Net Servicos it does not already own, following which it will explore the ‘convenience’ of a full corporate restructuring.

If its plans are realised, Embratel will be the last major Brazilian operator to reorganise at a corporate level. Only last month shareholders of rival telecoms group Telemar Participacoes, which markets Oi-branded services in Brazil through Brasil Telecom, Tele Norte Leste Participacoes and Telemar Norte Leste, agreed a plan to simplify the firm’s organisational structure, allowing its management to resume networks investments and set up a new dividend policy. In August 2011 the operating units’ respective boards approved a merger plan to create a single entity that will be Brazil’s second largest fixed and mobile operator by revenue. Meanwhile, Telefonica Brazil completed its restructuring in October last year – twelve months after first embarking on the project. The final phase saw the saw the group’s cellular unit formally absorbed into Telefonica’s primary business, Telecomunicacoes de Sao Paulo SA (Telesp).


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