The debt ridden Oi would presumably welcome the chance to offload its mobile assets
The future of Brazil’s fourth largest telco, Oi, has been precarious for some time. The company filed for bankruptcy in 2016 and, despite various debt restructurings, remains on the ropes.
For local rivals Telefonica (Vivo) and Telecom Italia (TIM Brasil), Oi’s money woes represent a significant opportunity. In February last year, reports suggested that some of Oi’s major stakeholders wished to divest of the company’s mobile unit, hooking the interest of Telefonica and TIM, as well as AT&T and other potential buyers.
Now, statements from both Telefonica and TIM suggest that they are indeed seeking to open negotiations for the joint purchase of Oi’s mobile unit.
The companies suggest that the purchase would not only accelerate the growth of their domestic businesses but would also benefit the market in general.
For Oi, the sale would mean an injection of cash that they sorely need to avoid insolvency, but the operator said it was nonetheless weighing all the alternatives.
The value of such a deal has yet to be determined, but Oi’s chief operating officer announced in December tat financial advisors had been hired to evaluate its mobile business, a move which has perhaps been the spark which has ignited TIM and Telefonica’s interest.
For now, Oi will bide its time, instead focusing on the divestment of its non-core assets, such as towers, as well as its 25% stake in Angolan operator Unitel, in order to focus on its more profitable FTTH broadband service.
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