Portugal Tel minorities plan to sue board over Espirito Santo debt

LISBON, July 18 Fri Jul 18, 2014 3:39am EDT

LISBON, July 18 (Reuters) - Several minority investors in Portugal Telecom are preparing to sue the board over its decision to buy debt from a holding company of the troubled Espirito Santo family, a representative of the shareholders said.

Portugal Telecom has been forced to accept a smaller role in a planned merger with Brazil's Grupo Oi because one of the family's holding companies, Rioforte, failed to repay the debt to PT.

Octavio Viana, the head of investor association ATM, said the 897-million-euro ($1.21 billion) exposure to the debt was "suicidal" and Portugal Telecom's board had failed to properly gauge the risks when it bought the debt from Rioforte in April. ($1 = 0.7395 Euros) (Reporting By Sergio Goncalves and Andrei Khalip; editing by Tom Pfeiffer)