BTG Pactual snags 58% of Oi’s fiber business for US$2.3bn

Brazilian telecom operator Oi accepted a 12.9bn-real (US$2.3bn) binding offer from investment bank BTG Pactual, through the BTG Pactual Economia Real and Participações fund and BTG’s GlobeNet fiber cable subsidiary, for 57.9% of its fiber infrastructure unit InfraCo, Oi said in a notice to the market.

With the acceptance, BTG Pactual becomes the “stalking horse” in Oi’s competitive process for InfraCo’s sale, preventing other bidders from undercutting BTG’s offer. The auction is expected to take place this quarter.

InfraCo's sale is part of Oi’s divestments, which also include the sale of the mobile business, towers, datacenters, and the satellite pay-TV operation.

Under the terms of the binding proposal, BTG will pay in three installments. At the end of the process, GlobeNet will be merged into InfraCo, which will become a neutral, wholesale fiber operation. 

GlobeNet owns and operates an underwater cable network spanning more than 23,500km serving customers in North and South America.

Oi owns over 400,000km of fiber networks deployed throughout Brazil and, through the neutral operation, it believes it can reach 32mn households passed with fiber by 2025. 

Oi’s fiber revenues reached 506mn reais in 4Q20, of which 480mn reais came from residential customers and 26mn reais from companies (B2B). 

The company’s consolidated capex, including international operations, totaled 1.73bn reais in 4Q20, down 12.8% year-on-year. For the full year it reached 7.3bn reais, a drop of 6.9%.