Debt-laden Brazil operator Oi opened talks with rivals Telefonica and Telecom Italia alongside several other suitors about a possible sale of its mobile unit to raise funds, Reuters reported.
Oi’s mobile division is thought to be worth around BRL10 billion ($2.4 billion). Other companies said to be in the frame include US operator AT&T and an un-named Chinese business.
In response to reports a Telecom Italia representative denied “any negotiations are underway with Brazilian [operator] Oi”.
While looking for a buyer for its mobile arm, Oi is reportedly considering other measures to improve its dwindling cash reserves. These include taking further debt and trying to speed up the sale of its stake in Angolan operator Unitel.
The company’s position is looking increasingly precarious. In Q2 alone it made a net loss of BRL1.6 billion and available cash dropped 32 per cent sequentially, leaving it with BRL4.3 billion. Net debt increased 24 per cent during the quarter to BRL12.6 billion.
The operator has been the subject of regular speculation about its future even before it filed for bankruptcy protection with more than $19 billion of debt in June 2016. It has since restructured its debt load after a lengthy process of negotiation with creditors and stakeholders.
In February, reports emerged investment companies with large stakes in the operator were considering selling-off its mobile operation to focus on its fixed and fibre business.
Oi is the fourth largest mobile operator in the Brazilian market with 37.7 million connections (according to GSMA Intelligence figures for Q2). The largest is Telefonica’s Vivo with 73.3 million, followed by America Movil’s Claro and Telecom Italia’s TIM, which both have around 56 million.Subscribe to our daily newsletter Back