Oi SA, the leading telecommunications company in Brazil is eyeing to book a net profit of $6.7 billion from the sale of its operating unit PT Portugal to Altice SA. According to sources, the proceeds from the sale will be used by the company to clear off its existing debts. Oi is looking forward to merge with PT Portugal’s parent company, Portugal Telecom SGPS SA. After weeks of discussion, the shareholders of Portugal Telecom finally approved the sale of its operating unit to the Luxembourg based company Altice. This marked the end of weeks of uncertainty surrounding the future of the deal.
A part of the money raised from the sale will be used to pay off the taxes and other fees. The Brazil based company will book the gain only after it has received formal approval from the authorities of the European Union. The approval is expected within ninety days, revealed a source from the company. When asked about the same to Oi spokesperson, he chose not to comment on the subject.
The final amount payable by Altice to Oi might vary since there is a clause in the contract which links the payment to the future performance of PT Portugal. Referring to the deal Oi spokesperson revealed that the company is looking forward to use the proceeds to reduce the heavy debt and to take part in the consolidation process of Brazil’s telecommunication industry.
According to the most recent market figures available, Oi pulled a curtain on its third quarter of 2014 with a net debt of $18.38 billion. In spite of weak figures projected in the reports of last quarter of 2014, analysts believe that the mobile phone market in Brazil still has considerable growth opportunities to offer to the telecom industry.