(Updates with vote, background, quotes)
By Daniel Alvarenga
LISBON, Jan 12 (Reuters) - Portugal Telecom SGPS shareholders on Monday postponed until Jan. 22 a vote on the sale of its former operations by its merger partner, Brazil’s Oi , complicating the 7.4 billion euro deal and possibly casting doubts on the long-agreed merger.
The decision is the culmination of a merger that went sour last year when a company belonging to the bankrupt Espirito Santo family defaulted on 900 million euros of loans from Portugal Telecom SGPS, which the Portuguese company had not informed Oi about.
Portugal Telecom’s clout in the new, merged company was subsequently reduced, and the heavily indebted Brazilian telecoms group Oi has now accepted a 7.4 billion euro bid by the French-based Altice for the Portuguese telecoms operations, which were transferred to Oi under the merger.
“The meeting was suspended. The new meeting is set for Jan. 22,” said a shareholder present at the meeting.
The vote had been called into question by a number of stakeholders as the sale would effectively unwind last year’s merger, which is not yet legally finalised and left Portugal Telecom as a holding company with a 25.6 percent stake in the enlarged Oi group.
Oi’s sale of the Portuguese telecoms operations to Altice still needs the approval of Portugal Telecom SGPS’s shareholders, prompting questions about whether the entire merger deal with Oi should be addressed in the process.
“There has already been a lot of uncertainty around this deal and now it means that it’s here to stay,” said Albino Oliveria, an anlayst at Fincor brokers.
Earlier on Monday, the Union of Workers of Portugal Telecom (STPT), which is a shareholder in PT SGPS, said it wanted a new general assembly. It said a scrapping of the merger should be studied “because there are sufficient signs of breaches by Oi to advance with a claim for a breach of the contract”.
“STPT is of the understanding that a new general assembly should be called when the annulment of the merger and a retroactive dissolution of the contract between PT and Oi should be discussed,” the union said in a statement.
Antonio Menezes Cordeiro, the chairman of PT SGPS’s shareholder assembly, said any attempt to break off the merger would raise the risk of litigation because the merger operation included a capital increase by Oi in Brazil.
Last week, Menezes Cordeiro had argued that the merger with Oi was invalid.
Share trading in heavily-hit Portugal Telecom shares has been suspended since Friday due to the uncertainty and pending additional information to be released by the company.
“The key question is when the market regulator will now lift the suspension on trade in PT SGPS shares and what happens next,” said Oliveira. (Additional reporting by Andrei Khalip; Writing by Axel Bugge; Editing by Greg Mahlich and Kevin Liffey)