Portugal Telecom (PT) is set to take a smaller stake in the company resulting from its combination with Brazilian operator Oi, in order to enable the deal to be completed “as soon as possible”.

As a result of the revised deal, Portugal Telecom will hold a 25.6 per cent stake in the new company. This is a significant reduction on the 39.6 per cent stake that was originally agreed in October 2013.

The move follows holding company Rioforte failing to repay a debt subscribed to by PT, which is held in subsidiaries contributed to Oi earlier this year. The purchase of the debt by PT had led to question marks over the future of the deal, with Oi stating that it had not been informed about PT’s decision and would “take any actions necessary to protect its interests”.

Rioforte is part of Grupo Espirito Santo, which is also a shareholder in PT.

PT now says the new deal will give it time to “minimise the loss in the value of the Rioforte debt”. According to Reuters, it has the option to buy more shares in Oi over a six year period, if it can recover some of the Rioforte cash.

The €847 million of short-term debt was not repaid by holding company Rioforte Investments by yesterday’s deadline. The debt was only recently disclosed to Oi, and an additional €50 million is due for payment tomorrow (17 July).

PT also said that in combination with Oi, it would “pursue its legal and procedural options against Rioforte and relevant related parties to the full extent of the law, to secure repayment of the Rioforte debt”.