- The Transactions are expected to enable CorpCo to generate operational and financial synergies, with a net present value of approximately R$5.5 billion, and benefit from increased scale and from its leading positions in the Portuguese and Brazilian markets.
- CorpCo will apply to be listed on the Novo Mercado segment of BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros ("BM&FBOVESPA"), the New York Stock Exchange ("NYSE") and the NYSE Euronext Lisbon, with the aim of increasing liquidity, diversifying of the shareholder base and adopting the highest standards of corporate governance. CorpCo will have a widely held shareholder base and will not have a controlling shareholder or group of controlling shareholders.
- As part of the Transactions, Oi is expected to undertake a share capital increase in the minimum amount of R$13.1 billion, with the goal of reaching R$14.1 billion, due in part to the contribution of the operations and business of Portugal Telecom, and the remainder, in a minimum amount of R$7 billion, with the goal of reaching R$8 billion, is expected to be in cash, with a view toward improving the balance sheet flexibility of CorpCo. The current shareholders of TelPart and an investment vehicle managed and run by Banco BTG Pactual S.A., will participate in the offering by placing a subscription order of approximately R$2 billion.
- The shares of CorpCo's will be listed on the Novo Mercado segment of the BM&FBOVESPA, on the NYSE Euronext Lisbon and on the NYSE, and the shares of Oi will be exchanged for shares of CorpCo, so that Oi becomes a wholly-owned subsidiary of CorpCo. Each Oi shareholder shall be entitled to receive one new common share of CorpCo for each Oi common share, and each Oi shareholder shall be entitled to receive 1 new common share of CorpCo for each 1.0857 Oi preferred shares. The exchange ratios have been determined based on the VWAP of Oi common and preferred shares over the period of the last 30 calendar days.
- Based on 2012 reported full year financials of Portugal Telecom and Oi, CorpCo had pro forma revenues of R$37.5 billion, EBITDA of R$12.8 billion and Operating Cash Flow of R$4.2 billion. Pro forma for the envisaged R$8.0 billion capital increase, CorpCo's net debt was R$41.2 billion, as of June 30, 2013
- The Transactions will also involve the merger of Portugal Telecom into CorpCo. As a result of such merger, the shareholders of Portugal Telecom will receive common shares of CorpCo in number equal to the number of these shares that will be held by Portugal Telecom immediately prior to such merger.
- Zeinal Bava, CEO of Portugal Telecom from 2008 to 2013 and current CEO of PT Portugal SGPS, S.A. ("PT Portugal") and of Oi, will be CEO of CorpCo and its subsidiaries.
- The closing of the Transactions will be conditional, inter alia, upon a series of events and approvals, such as the approvals by the shareholders of the companies involved, as well as the approvals by relevant regulatory authorities. The closing of the Transactions is expected to occur in the first half of 2014.
Portugal Telecom, SGPS, S.A. And Oi S.A. Announce They Have Executed A Memorandum Of Understanding For The Merger Of Their Activities
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