Portugal Telecom SGPS portrayed an unhappy future if shareholders fail to back the proposed €7.4 billion sale of Portuguese telecoms assets owned by Oi to French firm Altice.

Non-approval for the sale of Oi-owned PT Portugal at a meeting scheduled for next week (22 January) does not preclude its future sale but would create continued uncertainty regarding its fate, said the statement from PT SGPS (whose main asset is a stake in Oi, a leading operator in Brazil).

Limiting PT Portugal’s strategic options would “negatively affect its value” and, as a result, the equity value held by Oi and PT SGPS in PT Portugal would take a hit.

PT Portugal is the domestic telecoms business (mobile and fixed) of Portugal Telecom.

PT SGPS shareholders were due to meet on 12 January but decided to postpone their meeting until next week.

Approving the deal means a sunnier prospect, says the document. Oi would be better positioned to take part in consolidation in Brazil’s mobile market. In addition, it could engage in a more aggressive debt-reduction programme.

Oi ended Q3 2014 with a ratio of total debt to Ebitda of 3.76 times. Several scenarios were analysed to improve the debt outlook in the long term, including cost reduction measures and the disposal of assts.

Among the possibilities, Brazilian consolidation — either through acquisition or merger with a rival — was chosen as the best alternative by Oi.

However, Oi’s level of indebtedness limits its ability to access domestic and international capital markets and raises its financing costs. And the situation is not easily fixed through the sale of non-strategic assets, said the statement.