Boston, MA 06/05/2014 (wallstreetpr) – Oi SA (ADR) (NYSE:OIBR), the largest phone company of Brazil, on May 16, 2014 announced that it was witnessing a second back-to-back quarter of diminishing revenue, which in turn led to underscoring its plan for cutting costs through merger with SGPS SA, a Portugal Telecom company.
Present Position of Oi SA
The sales of Oi SA (ADR) (NYSE:OIBR) decreased 2.3%, i.e., $3.1 billion. The earnings of the company before the application of taxes, interest, amortization and depreciation increased 37% to 2.96 billion reais. This however increased because of the proceeds from the sale of transmission towers.
Finishing Touch to the Merger with SGPS SA
The Chief Executive Officer of Oi SA, Zeinal Bava is nearing the completion of the merger with the SGPS SA, a Portugal Telecom company. Zeinal Bava explained that this would help the company in streamlining the ownership structure and make it competitive against its rivals such as America Movil SAB, Telefonica Brasil SA (VIV) and Tim Participacoes SA (TIMP3). In order to reinforce the deal finally, Oi SA also raised capital of 8.25 billion reais in April 2014.
Statement from the Chief Executive Officer of Oi SA
The Chief Executive Officer of Oi SA (ADR) (NYSE:OIBR), Zeinal Bava said that the company was trying to deliver the results with trajectory which is evident about the turnaround of the company as well as continuous stabilisation in Portugal.
Share Offering- A Prerequisite to Close the Deal
Share offering of the company, which concluded on May 29, 2014 was said to be a prerequisite step for zeroing in on the Portugal deal. This will help the company in clearing its debt of Telemar Participacoes SA, the most controlling shareholder of the company. The company is planning to merge with the largest phone operator of Portugal in order to save the costs as network equipment.
Oi SA (ADR) (NYSE:OIBR) was successful in raising the capital despite the hindrance from minority shareholders who argued that this would lead to dilution of their stake.
