NEW YORK (TheStreet) -- Shares of Oi SA (OIBR) are up 6.25% today to $1.53 as a group of five banks are supporting plans by the Brazilian telecom firm to raise billions in new capital, guaranteeing that they will buy above 50% of the shares to be offered, sources say, reports the Wall Street Journal.
The banks are part of a larger group of 14 institutions coordinating the capital raise of between $2.58 and $3.44 billion, key to Oi's planned merger with Portugal Telecom (PT). The five banks would move to purchase the shares if there isn't sufficient interest from investors, the source added.
A spokeswoman for Oi declined to comment.
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TheStreet Ratings team rates OI SA as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate OI SA (OIBR) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself."