Brazil Telco plans to sell $7.2 bilion shares

Brazilian telecommunications company, Tele Norte Leste Participacoes (Oi) is planning to sell up to US$7.2 billion worth of new shares in a capital increase that will fund the company’s international expansion plans and pay down debt.
According to Oi, it would issue up to 126 million new common shares priced at US$23.20 per share. The company will also issue up to 252 million new preferred shares at US$17.01 per share. The capital increase was previously announced on July 28.
The company added that controlling shareholder Telemar Participacoes would buy a minimum of US$818.78 million worth of shares and possibly as much as US$1.35 billion, depending on the number of shares purchased by minority shareholders. Minority shareholders can accompany the offer.
As per the company, the capital increase was designed by Oi, controlling shareholders and strategic partner Portugal Telecom SGPS S.A. with an eye towards developing a Portuguese-Brazilian telecommunications company with global reach. The share sale should also help Oi compete on better footing against heavyweights such as America Movil (AMX), Telecom Italia (TI) and Spain’s Telefonica SA (TEF), which have increased their presence in the region.
Latin America’s growth rates, especially in mobile phone use, have outpaced more mature markets such as Europe and the U.S. and attracted intense interest from global telecoms looking to expand and counter declining revenues back home.