Oi partners could sue Portugal Telecom over debt deal -source

martes 15 de julio de 2014 10:23 GYT

By Guillermo Parra-Bernal

SAO PAULO, July 15 (Reuters) - Some large shareholders in Grupo Oi SA could sue partner Portugal Telecom SA if a debt investment made by the latter ends up in default, which could delay the companies' planned merger, a source close to the deal said.

Shareholders of Rio de Janeiro-based Oi want to push Portugal Telecom to take a smaller stake in the company resulting from the merger, depending on the outcome of the debt negotiations later on Tuesday, said the source, who declined to be identified because of the sensitivity of the issue.

The merger, however, is not at risk because "both companies need each other," the source added.

Going to court would be a "last resort" for the Oi shareholders, who were not informed of Portugal Telecom's 897 million euro investment in an investment vehicle controlled by Portugal's Espirito Santo family, the source said.

The family is also a key shareholder in the Portuguese firm. Oi is controlled by Portugal Telecom and other Brazilian companies including Andrade Gutierrez SA, LF SA, a number of state-controlled pension funds and development bank BNDES.

If the debt is not repaid and Portugal Telecom has to write off the investment, the shareholders in Oi would have to sue in order "not to be seen as negligent or lenient over a serious corporate governance flaw," the source added.

Rioforte, the Espirito Santo investment vehicle, is preparing to file for creditor protection with a court in Luxembourg in hopes of preventing uncontrolled asset sales at any prices, sources told Reuters on Tuesday.

Those same sources declined to comment on how such a filing would impact the repayment of Rioforte's debt to Portugal Telecom, adding that negotiations on the matter were ongoing.   Continuación...