Grupo Oi SA, Brazil's biggest fixed-line telephone carrier, on Monday got closer to its planned merger with Portugal Telecom SGPS SA as investors were willing to place more than enough offers in a share offering expected to be worth at least 8 billion reais ($3.6 billion), sources told Reuters. The offering consists of a combined 5.75 billion common and preferred shares and could rise by almost 2 billion shares with supplementary and additional allotments. According to two sources with direct knowledge of the deal, Oi's preferred shares may price at around 2 reais, or at the bottom of the suggested range of 2 reais to 2.30 reais.So far, investors have pledged to purchase as much as 10 billion reais worth of stock in the offering, said the sources, who requested anonymity because the deal is in the works. The share offering is scheduled to price later on Monday, according to a prospectus released on April 3.Preferred shares fell to a record low in Monday afternoon trading, shedding 5.6 percent to 2.37 reais, while common shares were down 2.4 percent to 2.47 reais. Banks estimate that Oi needs to raise at least 8 billion reais in order to adequately reduce Oi's stifling debt.Rio de Janeiro-based Oi, which also controls Brazil's fourth-largest mobile phone carrier, expects to use fresh capital to beef up CorpCo, the proposed name of the company after the proposed tie-up with Portugal Telecom.
Oi SA, formerly Brasil Telecom SA, is a Brazil-based holding company engaged in the provision of Switched Fixed-line Telephony Services (STFC) domestically and internationally. Shares of OIBR fell by 6.31% or $-0.07/share to $1.04. In the past year, the shares have traded as low as $1.09 and as high as $2.56. On average, 7027960 shares of OIBR exchange hands on a given day and today's volume is recorded at 6464168.
Portugal Telecom SGPS SA (Portugal Telecom) is a Portugal-based holding company primarily engaged in the telecommunications sector. Shares of PT traded higher by 4.68% or $0.1892/share to $4.23. In the past year, the shares have traded as low as $3.47 and as high as $5.35. On average, 482017 shares of PT exchange hands on a given day and today's volume is recorded at 3266294.
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