Oi approves measures to sell African holdings gained from PT merger deal

18 Sep 2014

Brazilian telecoms operator Oi, which is in the process of merging with Portugal Telecom (PT), issued a statement yesterday (17 September 2014) disclosing that its board of directors has authorised Oi’s management to take the necessary steps to sell Oi’s 75% stake in Africatel Holdings B.V., which notably is a 25% stakeholder in Angola’s leading cellco Unitel. Oi entered the ownership of Africatel when PT contributed its assets in a May capital increase as part of the Oi-PT merger plan. TeleGeography’s GlobalComms Database says that Africatel also holds the following stakes in African operators: a 51% interest in full-service operator Companhia Santomense de Telecomunicacoes (CST) in Sao Tome and Principe; a 34% stake in Namibian mobile market leader Mobile Telecommunications (MTC); and a 40% share in Cape Verde fixed network operator Cabo Verde Telecom (including mobile arm CV Movel). Furthermore, Unitel (Angola) has its own cellular subsidiaries – via Unitel International – in Cape Verde (Unitel T+) and Sao Tome & Principe (Unitel STP), representing a potential conflict of interests for Oi/PT in those countries.

Oi’s statement says that it aims to maximise the value of investment by coordinating the sale of shares with Africatel’s 25% shareholder, Samba Luxco S.a.r.l, an affiliate of Helios Investors L.P. Oi added that it is ‘committed to [working] with its local partners in each of the operating companies in which Africatel has invested to ensure a coordinated transition of ownership.’

However, there is the possibility of complications to this plan, as Oi notes: ‘Oi’s indirect subsidiary Africatel GmbH, which directly holds its investment in Africatel, received a letter from Samba Luxco today, in which Samba Luxco purported to exercise its put option to sell its shares in Africatel pursuant to the shareholders’ agreement among the shareholders of Africatel. According to this notice, the put option was triggered by the indirect transfer of Africatel shares, previously held by Portugal Telecom SGPS S.A. to the Company [Oi] as part of the capital increase the Company concluded in May.’

Oi’s statement goes on to play down the possibility of shareholder disputes, however, by adding: ‘As the Company has previously disclosed in the risk factors set forth in the offering documents related to its capital increase, the Company believes that no act or fact has occurred that, under the terms of the Africatel shareholders’ agreement, would give rise to the exercise of this [Samba Luxco’s] put option. Accordingly, and notwithstanding the high value that the Company places on maintaining a relationship of mutual respect with Samba Luxco, Africatel GmbH intends to dispute the availability of the put option by Samba Luxco under the existing circumstances, which, in accordance with the Africatel shareholders’ agreement, could lead to the commencement of arbitration to resolve the matter. Oi intends to focus its efforts on the sale of Africatel and/or its assets and believes that the successful achievement of this goal will make any such arbitration unnecessary.’