Navigate this market better. Subscribe for FREE stock alerts and information.

Friday, July 11, 2014

Brazil sees no risk for Oi-Portugal Telecom merger, sources say, (NYSE: OIBR)

Brazil's government does not believe a planned merger of Grupo Oi SA and Portugal Telecom SPGS SA is at risk, three sources with direct knowledge of the situation said on Friday, as tensions grew over Portugal Telecom's debt deals with troubled Banco Esp�rito Santo SA.Oi, which controls Brazil's fourth-biggest wireless carrier, and state development bank BNDES, a major sponsor of the merger, had lashed out at Portugal Telecom for not disclosing a debt investment in holding company Rioforte, which is under investigation in Luxembourg over liquidity issues.The representatives of two key Oi shareholders quit Portugal Telecom's board at the start of the month, when Portugal Telecom's 897 million euro ($1.22 billion) investment in Rioforte, controlled by key shareholder Banco Esp�rito Santo, came to light.Recent disclosures of financial irregularities at a web of family-held holding companies behind Banco Espirito Santo, Portugal's largest listed bank, have raised questions about potentially destabilizing losses at the bank and other companies in the family's orbit.

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 traded higher by 8.56% or $0.0552/share to $0.70. In the past year, the shares have traded as low as $0.63 and as high as $2.34. On average, 18491300 shares of OIBR exchange hands on a given day and today's volume is recorded at 52758472.