Oi approves debt-for-equity swap; CADE approves Algar stake sale; CEMIG fibre to be auctioned

8 Mar 2018

The board of directors at cash-strapped Brazilian telecoms company Oi has approved the terms of a debt-for-equity swap endorsed by creditors. In a securities filing, Oi said the board has approved the issuance of up to 1,756,054,163 new shares, corresponding to a maximum amount of BRL12.3 billion (USD3.8 billion). Under the terms of the agreement, unsecured bondholders will be able to participate in the capitalisation of Oi by swapping a portion of their debt for shares in the company – as agreed in a creditor-approved restructuring plan back in December.

Brazil’s antitrust authority, the Administrative Council for Economic Defence (Conselho Administrativo de Defesa Economica, CADE), has approved the sale of a 25% stake in regional operator Algar Telecom, to Archy LLC, an affiliate of Singapore’s GIC sovereign wealth fund, citing no competitive concerns. The deal, which is valued at around BRL1 billion (USD306.2 million), was announced in January this year, and prompted Algar to cancel its planned initial public offering (IPO).

Finally, state-run utility Companhia Energetica de Minas Gerais (CEMIG) has informed parties interested in its fibre-optic network that it intends to sell those assets in an auction rather than privatise its CEMIG Telecom unit. Earlier this month, its board approved the integration of CEMIG Telecom into the parent company, thus paving for way for an asset sale. Sources told Reuters that the sealed bid auction will take place via the B3 (formerly BM&FBOVESPA) stock exchange in Sao Paulo.

Brazil, Algar Telecom, CEMIG Telecom, Oi