Oi-Brasil Telecom Dials Jumbo BRL Loan

The long anticipated acquisition of Brasil Telecom (BT) by Telemar’s Oi, announced Friday, sets the stage for jumbo M&A financing that could exceed BRL16bn in size. Oi agreed to buy the equity in BT for BRL5.86bn. But it is heard having to shell out an additional BRL11bn to cover all of its subsidiaries’ debt and equity, including minority shareholders in those entities. Telemar is meanwhile narrowing down a list of lenders on a facility said last week to be in the BRL16bn size area, according to bankers. The company will seek to raise as much as possible in local currency, providing an interesting data point for BRL syndicated lending, which remains undeveloped. According to a statement filed with the CVM, Credit Suisse is the buyer of record for 100% of the shares in Invitel, the holding company that controls BT. The investment bank is also acting as an endorser and intermediary for Telemar in the deal, says the contract. Credit Suisse advises Oi while Citi is working with BT.