Private equity firm LetterOne has revealed that it could invest in Brazil under the right circumstances.
BTG Pactual – adviser to debt-ridden operator Oi - reportedly received a proposal from LetterOne indicating that the Russian-backed investor could channel as much as $4 billion into the beleaguered operator. While predominantly a fixed provider, Oi has a smaller mobile unit.
LetterOne is keen to secure exclusive negotiations with Oi as the operator pursues a merger with Telecom Italia’s Brazilian unit, TIM Participacoes. The $4 billion investment is dependent on a successful combination of the 2 units.
Backed by Russian billionaire Mikhail Fridman, LetterOne is a significant player in the telecoms space with a 48% stake in VimpelCom and a 14% holding in Turkcell. Oi has stated that it will consider the proposal carefully.
Oi is the fourth-largest operator in Brazil, behind TIM Participacoes and market leaders Claro and Vivo, which are owned by America Movil and Telefonica respectively. Consolidation in the market has long been anticipated, with speculation last year suggesting that Oi, Vivo and Claro would jointly take over TIM Participacoes.