Telemar Plots Local Issue

Brazilian president Lula has signed a decree changing local telecom rules, clearing the way for Telemar’s BRL13bn acquisition of Brasil Telecom. The telecom provider also known as Oi announced it would immediately apply for final approval from telecom regulator Anatel, aiming to beat a December 21 deadline and avoid a BRL500m penalty. Telemar CEO Luiz Eduardo Falco told LatinFinance last week that if the decree was signed this week, he was hopeful the deal would be finalized by year-end. The rule change comes 7 months after the two announced the deal and reverses a rule restricting phone companies to one region of Brazil. Separately, Telemar plans to issue up to BRL3.5bn in 2013 debentures to help fund 2009 operations, pending shareholder approval December 9. It does not indicate bookrunners on the issue, which is expected to pay interest at DI plus 4%. Markets await terms on Telemar’s 1-year BRL-denominated bridge facility of some $1.0bn-$1.5bn equivalent early next week, the final piece of the Brasil Telecom acquisition financing.