SAO PAULO, Oct 2 (Reuters) – Brazilian telecom carrier Oi SA may consider selling its mobile operation if it gets attractive offers, Chief Operating Officer Rodrigo Abreu told Reuters on Wednesday, following reports of interest from its largest rivals.
Still, Abreu said in an interview just weeks after being tapped for the new role at Oi that such a deal is not essential to the company’s strategic plan: “It is not part of our short-term plan and we do not rely on selling our mobile operations to fulfill investments, but it is an option in the future.”
Oi has not begun a formal sale process for its mobile unit, he added.
Reuters reported last month that Oi was in preliminary talks with Spain’s Telefonica SA and Italy’s Telecom Italia SpA to sell its mobile network and avoid a potential cash crunch.
Brazil’s largest fixed-line carrier is still struggling to turn around its business since filing for bankruptcy protection in June 2016 to restructure approximately 65 billion reais ($15.7 billion) of debt.
Abreu said the sale of non-core assets should be enough to finance investment in its fiber-to-the-home (FTTH) broadband service, a major focus of the company.
In July, Oi disclosed plans to raise up to 7.5 billion reais by selling non-core assets – including towers, data centers, real estate and its 25% stake in Angolan carrier Unitel.
Abreu said Oi expects to divest its Unitel stake this year and has made some progress selling three real estate assets.
“There will be neither 5G nor high-speed broadband service in Brazil without Oi, either as a carrier or an infrastructure provider to other carriers,” Abreu said.
He acknowledged that Oi’s mobile customer base, the fourth-largest in Brazil, has shrunk, but he said the business is sustainable. “We will continue to invest selectively to keep it valuable,” Abreu added.
Abreu reaffirmed that Oi is likely to generate positive cash flow by 2021, as forecast in its July strategic plan.
The carrier is in talks to potentially issue 2.5 billion reais in debt backed by receivables or proceeds of future asset sales to meet short-term cash needs, he said, declining to specify the collateral or give a deadline for the transaction.
Oi’ preferred shares ended 2.1% down on Wednesday at 1.39 reais, accumulating gains of over 10% so far this year.
($1 = 4.1491 reais)
Reporting by Gabriela Mello and Carolina Mandl; Editing by