Portugal Telecom, Brazil's Oi propose merger
LISBON Oct 2 (Reuters) - Portugal Telecom and Brazil's telecommunications giant Oi, in which PT is the largest shareholder, have proposed a merger into one single Brazilian entity with projected synergies worth a net 1.8 billion euros, Portugal Telecom said.
"The merger is a natural fulfilment of the industrial alliance established in 2010 creating a leading telecoms operator led by Zeinal Bava as CEO," it said.
As part of the merger, Oi proposes to undertake a cash capital increase of a minimum of 7 billion reais (2.3 billion euros), and with a target of 8 billion reais (2.7 billion euros to improve the balance sheet flexibility of CorpCo, it said.
Each ordinary share in Oi will be exchanged for 1 share in the new entity, CorpCo, and each preferred share will be swapped for 0.9211 CorpCo shares. One PT share will be exchanged for the equivalent of 2.2911 euros in CorpCo shares to be issued at the price of capital increase, plus 0.6330 CorpCo shares.
At completion, and assuming the targeted cash capital increase, PT shareholders will own 38.1 percent of CorpCo. (Reporting By Andrei Khalip)
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