Oi seeks $2.9bn for mobile unit amid business unit split

Oi seeks $2.9bn for mobile unit amid business unit split

Rodrigo Abreu Oi.jpg

Brazil’s Oi has announced plans to spin off four business units from its main operations.

According to Reuters, the Brazilian telco, as part of its ongoing bankruptcy protection proceedings, will do this ahead of a billion-dollar asset sale to fund its broadband fibre unit.

Specifically, Oi plans to create four units in towers, data centres, mobile assets and fibre infrastructure – all of which will be sold either partially or in its entirety.

Proceeds from the sales, which is expected to be approved sometime in August, will be used to pay down its debt and to expand its broadband fibre network.

The news forms part of amendment made by Oi earlier this week in which the company announced its intention to sell its mobile unit for at least 15 billion reais ($2.9 billion).

When questioned on the cost of the unit, Oi CEO, Rodrigo Abreu (pictured),said:

“Oi has dramatically increased the value of its mobile unit over the last two years. Having a binding offer beforehand would have been ideal, but this is a fair assessment and we had to provide it, otherwise it would be impossible for our creditors to vote on the proposed sale.” 

Additionally, the company intends on starting the bidding in Q4 2020 and to close the transaction by the end of 2021.

According to Reuters, Oi has received interest from all major competitors including TIM Participações and Telefonica Brasil, in buying the company’s mobile business.

Abreu added that the company also expects to raise a minimum of 1 billion reais ($190 million) for another of its units comprised of mobile towers and telecoms infrastructure in shopping centres, hotels and elsewhere.

He also confirmed that the company has already received a firm offer for its five data centres, for no less than 325 million reais ($61.9 million).

Plans are also in the works for Oi to sell 51% of its fibre infrastructure unit, with bidding set to start in Q1 of 2021 and to close by September 2021.

There are no plans to sell its fixed line, cable TV and corporate telecoms businesses, or its residential broadband business which operates under a division named Client Co.

In January, the company sold a 25% stake of its operations to Unitel to Angola’s state-owned oil company Sonangol for $1 billion.