Bloomberg News

Telefonica’s Vivo Gets 3 Billion-Real Loan to Boost Coverage

September 20, 2011

(Adds use of proceeds in second paragraph.)

Sept. 20 (Bloomberg) -- Telefonica SA’s unit Vivo, Brazil’s biggest mobile-phone operator by numbers of customers, will get a 3 billion-real ($1.7 billion) loan from development bank BNDES to expand its coverage and build a data processing center.

Vivo, based in Sao Paulo, will use the financing to improve its telecommunications network and to develop infrastructure for new technologies between 2011 and 2013, as well as for research and development, the state lender said in an e-mailed statement today. The company’s new data center, to be built in the state of Sao Paulo, will start operations in the first half of next year, according to the statement.

The company’s shares stopped trading in Sao Paulo in June after a merger with Telecomunicacoes de Sao Paulo SA, or Telesp, also a unit of Madrid-based Telefonica. The shareholders of the two companies have yet to approve the merger in meetings scheduled for October, Telesp said in a regulatory filing on Sept. 13. Telesp’s board approved the deal on Sept. 14.

Vivo ended the month of August with 66.2 million users, equivalent to 30 percent of the 224 million mobile phone subscribers in Brazil, telecommunications agency Anatel said in a statement yesterday.

Telesp dropped 0.4 percent to 52.19 reais in Sao Paulo trading at 12:30 p.m. New York time, compared with a 0.7 percent gain for the benchmark index Ibovespa.

--Editors: Karen Eeuwens, Francisco Marcelino.

To contact the reporter on this story: Tais Fuoco in Sao Paulo at tfuoco1@bloomberg.net

To contact the editor responsible for this story: Francisco Marcelino at mdeoliveira@bloomberg.net


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