After yesterday’s announcement that Zambia’s UZI has finally abandoned its attempts to roll out a network, it looks like another long-running saga involving a cash-strapped operator is coming to an end with an announcement from Brazil’s Oi.
Admittedly Oi did actually have a business up and running, but it has long been looking for buyers for its mobile assets. Now, in what is referred to as an Amendment to the Judicial Reorganisation Plan published on 15 June, Oi has made clear that it plans to sell its mobile assets via what it describes as a competitive process.
The company wants interested parties to submit sealed bids for 100 percent of its mobile unit. The minimum bid will be $2.9 billion. The mobile assets will be awarded to the bidder that offers the highest price above the minimum price, unless the second highest bid (assuming it is no more than five percent lower than the highest bid) ‘provides greater legal assurances and certainty for the closing of the sale’.
To pave the way for the sale, Oi’s mobile business – along with its tower unit, data centre business and InfraCo arm – will be converted into distinct ‘isolated production units’, which will be formed as special purpose stock entities.
Oi’s hunt for cash to deal with its debts has been going on for some while. As we reported in January, Oi has already sold its 25 percent stake in Unitel, the leading operator in Angola, to Sonangol, the group that oversees petroleum and natural gas production in Angola, for one billion dollars.
In fact as far back as October rumours were flying that Telefonica, America Movil and Telecom Italia had begun talks to jointly purchase Oi’s mobile division and then divide the assets between them. The new sale plan would, presumably, mean that there is still a fourth mobile operator in the country.
The sale of Oi’s mobile division and other core operations is part of a plan to guarantee the survival of its fixed-line business.