Oi CEO rules in sale of Portuguese assets, but commits to merger

The acting CEO of Oi has rebutted suggestions the Brazilian company will unwind its merger with Portugal Telecom, but told Reuters that it may consider selling some Portuguese assets acquired through the merger to reduce debt.

 SFR, Altice, Bouygues, Orange, Vivendi

Altice founder Patrick Drahi
Copyright: Aude de Cazenove REA

Bayard Gontijo, who took over as CEO of Oi following the resignation of Zeinal Bava this week, said only non-core assets would be considered for sale, such as mobile phone towers, property, and its Africatel unit, which is valued at around 4 billion reais (€1.3 billion/$1.7 billion).

Bava's resignation came amid rumours that Altice, the telecoms and cable holding group owned by billionaire Patrick Drahi, is interested in buying Portugal Telecom. Reports now say that Altice wants to enter into exclusive talks with Oi on the Portuguese business.

Citing unnamed sources, Reuters said Altice is confident it can make rapid progress towards a deal, which could value the Portuguese business at between €6 billion ($7.6 billion) and €6.5 billion.

Bloomberg, also quoting unnamed sources, said Altice is already holding talks with Oi shareholders on buying the Portuguese assets.

When Bava's resignation was first announced, there was speculation that the merger of Oi and Portugal Telecom to form CorpCo would unravel; Bava has been a driving force in the merger process.

It is also speculated that Oi could be a take-over target, while the company itself has hired investment bank BTG Pactual to evaluate a potential acquisition of TIM Participações SA, the Brazilian mobile unit owned by Telecom Italia.

Oi is under considerable pressure in its home market following Telefónica's agreement to buy broadband provider GVT from Vivendi. Telefónica already competes on the mobile market under the Vivo brand.

"We are protagonists in the ongoing consolidation in the Brazilian market," Gontijo told Reuters.

Altice has not commented directly on the reports, but noted in a statement emailed to FierceWireless:Europe earlier this week that as a long-term investor, Altice is looking carefully all opportunities in every countries where the group is present. "Portugal is one of them since the acquisition of Cabovisao (2012) and ONI (2013)," the company added.

For more:
- see this Reuters article
- see this separate Reuters article
- see this Bloomberg article

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