Henrique Granadeiro, the CEO of Portugal Telecom, has resigned following a series of missteps that forced the operator to lower its share of the entity that will be created through a merger with Brazil-based Oi.
The Portuguese operator's management board has not yet confirmed who will replace Granadeiro, but said it has called a shareholder meeting for Sept. 8 to discuss its next steps and all matters relating to the merger with Oi to create CorpCo.
The company stressed that it believes the interests of its shareholders are still best served by a continued commitment to proceed with the merger. The board also said it had never approved or even discussed any investment in debt issued by Rio Forte Investments SA (Rioforte), a holding company owned by Espírito Santo group.
According to Reuters, Granadeiro has also said in a letter that he was surprised by the Espírito Santo debt default, but has not commented on whether he was personally involved.
The Portuguese operator was forced to accept a lower stake in CorpCo after the terms of the merger were revised following the non-repayment of the almost €900 million ($1.2 billion) of debt issued by Rioforte. Oi has previously criticised PT for not disclosing this investment in advance of a capital raising exercise that was completed in May, in which PT participated.
PT's board said it has now appointed PriceWaterhouseCoopers "to independently analyse the procedures and actions to date on this matter and undertake a wide-ranging analysis of all relevant aspects concerning treasury applications in Grupo Espírito Santo entities."
Meanwhile on Sunday Portugal injected almost €5 billion into Banco Espírito Santo to stave off a collapse of the banking group. The Guardian reported that healthy businesses would be spun off into a "good" bank, while toxic assets would be placed into a "bad" bank.
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