China Telecom enlists Goldman Sachs to assist with Oi takeover

2 Oct 2017

China Telecom has enlisted global investment firm Goldman Sachs to assist with the takeover of stricken Brazilian operator Oi, Bloomberg reports, citing sources familiar with the matter. The Chinese company will be joined by private equity firm TPG Capital in the deal, which will see the two parties acquire Oi’s mobile and fixed line businesses. Any agreement must involve Oi’s current shareholders, the company’s numerous creditors and the Brazilian government, however.

China Telecom is not the first Chinese company to express an interest in Oi; last month it was reported that China Mobile was in preliminary talks with Brazil’s National Telecommunications Agency (Agencia Nacional de Telecomunicacoes, Anatel) regarding the potential acquisition of the mobile phone assets owned by the debt-wracked telco. Anatel officials reportedly met with China Mobile personnel and executives from the China Development Bank on 11 September to discuss terms.

According to TeleGeography’s GlobalComms Database, Oi filed the largest bankruptcy request in Brazil’s history in June 2016, after failing to reach an agreement with creditors. The filing, which covered Oi and six subsidiaries, listed BRL65.4 billion (USD19.2 billion) of debt and the company chose judicial reorganisation to preserve the value of its holdings and to continue providing services to its customers.

Brazil, China Telecom Corporation, Oi, TPG Capital