(Adds Breakingviews column)
By Guillermo Parra-Bernal and Brad Haynes
SAO PAULO, April 3 A group of 14 banks led by Grupo BTG Pactual SA on Thursday removed a firm commitment to subscribe to part of a 24.22 billion reais ($10.6 billion) share offering by Brazilian phone carrier Grupo Oi SA if investor demand falls short.
The offering's revamped terms, published in a Thursday newspaper ad, came after securities industry watchdog CVM urged BTG Pactual and Oi to specify whether the banks were ready to guarantee a 6 billion reais portion of the offering. Originally, the banks pledged to backstop the deal if it met a minimum level of investor demand.
Itaú Unibanco Holding SA and Banco Bradesco SA considered pulling out of the deal on Tuesday, sources told Reuters that day. Bloomberg News reported that Citigroup Inc and Goldman Sachs Group Inc also had second thoughts about the plan before BTG Pactual asked them to reconsider. All the banks agreed to stay in the offering.
A massive bank pullout would have jeopardized the offering, the cornerstone of Oi's merger with its largest shareholder, Portugal Telecom SGPS SA, analysts said.
Oi's stock offering will consist of up to 5.75 billion common and preferred shares and could increase by almost 2 billion shares with supplementary and additional allotments.
The value of the transaction is based on Wednesday's closing prices for Oi's stock.
Common shares of Oi fell 1.6 percent to 3.15 reais on Thursday and are down 11 percent this year. Its preferred shares edged up 0.3 percent to 3.09 reais but have lost over 13 percent this year.
According to the ad, the company and banks can begin approaching potential investors for the deal on Wednesday, with pricing for the offering taking place on April 28. The shares will begin trading on April 30.
Rio de Janeiro-based Oi, which controls Brazil's fourth-largest mobile phone carrier and the largest fixed-line phone operation in the country, expects to use fresh capital to beef up CorpCo, the name of the company after the tie-up with Portugal Telecom.
Executives at Grupo Oi SA and Portugal Telecom say CorpCo will have more clout to compete in Brazil with bigger rivals such as Spain's Telefonica SA, Telecom Italia SpA's TIM Participações SA and Mexico's America Movil SAB .
($1 = 2.28 Brazilian reais) (Additional reporting by Marcela Ayres and Silvio Cascione; Editing by Lisa Von Ahn and Phil Berlowitz)