Safra bros could acquire BellSouth's Cellcom stake
The Safra brothers could get BellSouth's 34.8% stake in cellular provider Cellcom in exchange for the Safra holding in Brazilian cellular provider BCP, Dow Jones Newswires reports.
"The agreement has been made," a source close to the talks told Dow Jones. "They just need to get the lawyers to put the documents together and disclose the key details to the market."
The proposed asset swap would end BCP's default saga after the Brazilian company defaulted on a $375 million debt repayment as an investment fund run by Banco Safra that holds 45% of BCP and BellSouth, also with 45%, attempted to reach a refinancing agreement. Safra representatives had offered to inject $325 million into the debt-laden Brazilian operator on the condition BellSouth provide a similar sum. BellSouth did not respond to the offer.
BCP owes $1.6 billion to a consortium of 40 banks, including ABN Amro and Citibank.Monday, a Safra representative declined to provide official comment on the matter, while a BellSouth official wouldn't say if the scope of the talks between the two sides had widened.
Previously, BellSouth has said it was interested in restructuring BCP's balance sheet.BCP - which provides service to about 1.7 million users in metropolitan Sao Paulo but is not yet profitable - has often been cited as a takeover target in Brazil's consolidating wireless sector, which ranks as the sixth largest globally.
Discount Investments, holder of a 25% stake in profitable Cellcom, and Safra's representatives had negotiated over the past several months to acquire the BellSouth stake, but talks stalled as Discount and Safra valued Cellcom at $1.5 billion and BellSouth put a $2.5 billion price tag on the company.
