TPG, China Telecom poised for Oi takeover

7 Nov 2017

China Telecom is set to team up with private equity firm TPG Capital to jointly acquire a controlling stake in financially stricken Brazilian operator Oi, Reuters reports. Strategic partner TPG will take the majority stake, while operational partner China Telecom will assume a smaller equity stake. Late last month representatives from both firms met with government officials in Brasilia to discuss the deal. As part of its bid, China Telecom has reportedly offered to construct a fibre network covering more than 2,000 municipalities, while the acquiring parties will also shoulder around BRL20 billion (USD6.1 billion) in outstanding regulatory fines. Unnamed sources added that the deal is partly dependent on Oi – which is set for a crucial meeting with creditors on 10 November – resolving its ongoing debt issues.

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 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