Bloomberg News

Telemar Units Advance on Restructuring Vote: Sao Paulo Mover

January 26, 2012

Jan. 26 (Bloomberg) -- Units from Telemar Participacoes, Brazil’s telephone company that operates under the Oi brand, rose after announcing the date for a shareholder meeting to vote on the company’s restructuring plan.

Tele Norte Leste Participacoes SA gained 2.7 percent to 16.87 reais at the close of trading in Sao Paulo, the steepest increase since Jan. 2. Brasil Telecom SA rose 3.8 percent to 11.20 reais.

The company scheduled a shareholder meeting for Feb. 27 to vote on the restructuring plan announced May 24 by Telemar Participacoes. The plan is to merge the units into one entity that will trade under the name Oi SA.

“We expect the merger to be approved, and a simplified structure will likely reduce costs, increase liquidity and allow the company to announce a formal dividend policy,” analysts Valder Nogueira, Bruno Mendonca and Gregorio Tomassi from Banco Santander SA said in a note to clients today.

Under the proposal, each Tele Norte common share will be exchanged for 2.3122 Brasil Telecom common shares, according to a regulatory filing on Aug. 29. Tele Norte’s preferred stock will be exchanged for 1.9262 Brasil Telecom preferred shares and 0.1879 of Brasil Telecom’s common shares.

Telemar Norte Leste’s common shares will be exchanged for 5.1149 Brasil Telecom similar stocks, the company said in the filing. Telemar Norte Leste’s Class A and B preferred stock will be swapped by 0.3904 Brasil Telecom common shares and 4.0034 Brasil Telecom preferred stock.

--Editors: Glenn J. Kalinoski, Richard Richtmyer

#<129514.3938884.2.1.95.14779.25># -0- Jan/26/2012 20:21 GMT

To contact the reporter on this story: Katerina Petroff in Sao Paulo at kpetroff@bloomberg.net

To contact the editor responsible for this story: Helder Marinho at hmarinho@bloomberg.net


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