Troubled Brazilian telco Oi has announced that it has reached an agreement with its shareholder Bratel, a subsidiary of Pharol, for ‘the termination and extinction of any and all judicial and extrajudicial litigation in Brazil, Portugal and all the various countries where there are ongoing discussions involving companies of the two groups’.
The boards of directors of both companies have unanimously approved the agreement and believe that the decision will allow the telco to focus entirely on its operational turnaround and eliminate the distractions and costs relating to litigation. Among the conditions to be met by Oi are a payment of EUR25.0 million (USD28.7 million) to Pharol and the delivery of 33.8 million Oi shares (held in treasury) to Pharol.
TeleGeography notes that Pharol (known as Portugal Telecom SGPS [PT SGPS] prior to May 2015) purchased a stake in Telemar Norte Leste (TNL – a precursor to Oi) back in 2011. In October 2013 Oi and PT SGPS agreed a deal to combine their operations into a new Brazil-based company, but the pact unravelled a year later – kickstarting a lengthy period of financial instability and legal issues for the Brazilian operator.