SAO PAULO (Reuters) - Brazilian telecom company Oi SA (OIBR4.SA) is not focused on being acquired in the short-term, a top executive said, in an apparent change of tune for the nation’s largest fixed line operator.
In a phone interview accompanying Oi’s fourth-quarter results release late Thursday, Chief Financial Offer Carlos Brandao said executives were focused on improving operational numbers at the carrier and completing a debt-for-equity swap that would formally take the firm out of bankruptcy protection.
“We believe that in the medium term (consolidation) is a tendency, but in the short-term we’re completely focused on two aspects: the implementation of the (recovery) plan, the conversion of debt into equity, and the capital raise, as well as reversing the revenue trend,” he said.
“The question of M&A, we don’t think that’s an issue in the very short term and, basically, it’s not an issue that’s being prioritized in the executive agenda.”
In December, creditors in Oi approved a debt-for-equity swap to take the company out of bankruptcy protection after a messy 18-month dispute between bondholders and equity holders. Chief Executive Eurico Teles said at the time the company was for sale and executives were ready to receive international investors.
The fourth-quarter results, which were partially released in March, showed a loss of 3.69 billion reais ($1.08 billion), compared with a 535 million-real profit in the third quarter and a 4.73 billion real loss in the same quarter a year ago.
Earnings before interest, taxes, depreciation and amortization (EBITDA) came to 1.3 billion reais, down 26.1 percent from the 2016 fourth quarter.
In the interview, Brandao attributed some of the weak quarter-on-quarter performance to price adjustments during the period and variable compensation packages.
The results released in March also showed over 6 billion reais in judicial deposits, or funds paid into a kind of escrow account during judicial proceedings.
The size of the deposits surprised many, and Brandao said Oi was readjusting its accounting procedures.
“We’ve had more than 300 professionals working in this area,” Brandao said. “We found deficiencies that we’re now attacking via an action plan in our compliance department.”
Brandao said Oi was attempting to formally complete the debt-for-equity swap in June, ahead of the official July 31 deadline. He said the company hoped to complete a capital increase detailed in the country’s bankruptcy recovery plan in the fourth quarter.
Reporting by Gram Slattery; Editing by Richard Chang and Franklin Paul