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Monday, July 14, 2014

Oi-Portugal Telecom merger may be renegotiated if debt default- minister, (NYSE: OIBR)

Shareholders of Grupo Oi SA are likely to seek to renegotiate terms of a merger with Portugal Telecom SPGS SA if the latter's debt investments with Banco Esp�rito Santo SA end up in default, Brazilian Communications Minister Paulo Bernardo said on Monday.Shareholders of Oi, which include state development bank BNDES, could also seek to change the stakes that partners would have in the combined company in a default, Bernardo said. But he said he does not believe a planned merger of Oi and Portugal Telecom is at risk.Recent disclosures of financial irregularities at family-held holding companies behind Banco Esp�rito Santo SA, Portugal's largest listed bank, have raised questions about potentially destabilizing losses at the bank and other companies in the family's orbit. One of those holding companies faces the repayment of almost 850 million euros ($1.16 billion) in debt on Tuesday."There's a transaction that matures tomorrow. If the money comes back, it's fine. If it doesn't come back, it's evident that BNDES and the other partners will revisit terms of the merger and their stakes in the combined company. This situation certainly badly hurt one of the partners," Bernardo said.

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 3.94% or $-0.0276/share to $0.67. In the past year, the shares have traded as low as $0.63 and as high as $2.34. On average, 19743700 shares of OIBR exchange hands on a given day and today's volume is recorded at 32400232.