Brazilian operator Oi is in talks with two banks to raise as much as $1 billion in credit to refinance short-term debt as it preps a local tie-up with TIM, Bloomberg reported.

The unnamed banks may also join Oi’s M&A advisory team. Other sources said Barclays and Banco Santander could play a role in the transaction. Grupo BTG Pactual is tipped to remain as the lead negotiator, according to one of the sources.

BTG went through some trouble last year with its former CEO being arrested, which has investors worried it could hinder Oi’s M&A efforts, but the operator has downplayed concerns by saying BTG is only an adviser.

Oi’s net debt increased by 7.5 percent in the third quarter to $9.2 billion from the previous three-month period.

In October last year, it entered into a deal with LetterOne, also concerning an effort to tie up with TIM, saying the alliance potentially “enables the consolidation of the sector”.

“A potential business combination of Oi and TIM Participacoes should result in the creation of a more complete and well-positioned telecommunications operator that would be able to compete against global players already operating in Brazil,” Oi had said at the time.