BRASILIA Brazilian telecoms company Grupo Oi SA (OIBR3.SA) aims to raise about 14 billion reais ($5.9 billion) in a share offering, the company said in a filing to the national securities regulator on Thursday.
The capital raising will be part of Oi's merger process with Portugal Telecom PTC.LS, which will subscribe at least 7 billion reais in Oi shares in the operation.
Portugal Telecom and Oi in October announced plans to combine their operations to form a new company with more than 100 million subscribers, with almost $19 billion in annual revenue to compete in Brazil with bigger global rivals such as Spain's Telefonica SA (TEF.MC) or Mexico's America Movil (AMXL.MX).
Grupo Oi is Brazil's most indebted telecom company. It plans to continue selling assets to pay down debt after the recent disposal of underwater fiber optic cables bolstered its fourth-quarter profit, Chief Executive Zeinal Bava said on Wednesday.
Oi will offer ordinary and preferred shares, including American Depositary Receipts. Pricing date was set for April 16, and the settlement is expected to take place on April 23.
Banco BTG Pactual SA (BBTG11.SA) will be the lead coordinator of the offering. Oi also hired Bank of America Corp (BAC.N), Barclays PLC (BARC.L), Credit Suisse Group AG CSGN.VX and Banco Espirito Santo SA BES.LS.
A special investment vehicle managed by BTG Pactual will also subscribe up to 2 billion reais in the offering.
Portugal Telecom's capital injection in Oi will be voted on by Portugal Telecom shareholders in an extraordinary general meeting on March 27, Oi said in the filing.
Oi's net debt climbed 21 percent from a year earlier to 30.416 billion reais at the end of December.
(Reporting by Silvio Cascione; Editing by David Goodman and W Simon)