Friday, 20 January 2017

Oi seeks merger with AT&T-owned Sky Brasil

By Nick Wood, Total Telecom
Friday 25 November 16

Local news report claims troubled telco to discuss proposal at a board meeting next month.

Troubled Brazilian telco Oi is keen to strike a merger deal with Sky, the country's second-largest pay-TV provider. This is according to sources cited in a report by O Globo over the weekend, which claimed that Oi's board will meet next month to discuss a proposed tie…

Troubled Brazilian telco Oi is keen to strike a merger deal with Sky, the country's second-largest pay-TV provider.

This is according to sources cited in a report by O Globo over the weekend, which claimed that Oi's board will meet next month to discuss a proposed tie-up.

"The union of Oi with Sky is on the agenda. Oi's solution in the medium and long term is consolidation," the unnamed source said, in the report.

Sky Brasil is a unit of U.S.-based DirecTV, which is owned by AT&T. The combination of Oi and Sky would expand the telco's exposure to Latin America's largest economy. Alternatively, a deal with Oi could also make AT&T's mind up to sell out of the country altogether.

Sky is not the only potential suitor for Oi.

In September, Valor Economico reported that Daniel Hajj, CEO of Mexico-based telco giant America Movil, is keen on consolidation in Brazil. America Movil competes with Oi in Brazil under the Claro brand.

According to O Globo any talks between Oi and Sky will take place in parallel to the former's debt restructuring.

The telco filed for creditor protection in June owing 65 billion reais (€17 billion), including BRL15.4 billion worth of liabilities held by regulators and tax authorities, and approximately BRL34 billion held by unsecured creditors.

Oi submitted a debt restructuring plan in September that attracted strong criticism for offering bondholders new debt in the company that was worth approximately 30% of what they are owed.

Negotiations between Oi and its creditors are ongoing.

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