Canada Pension Plan Joins BTG in Bid for Brazil Telecom Business

(Bloomberg) -- The Canada Pension Plan Investment Board is joining a fund managed by Banco BTG Pactual SA to make a binding offer for the fiber unit of Brazilian telecom carrier Oi SA, according to people familiar with the matter.

The bid is expected Jan. 22, along with two other binding offers, said the people, who asked not to be identified because the matter is private. Highline do Brasil, part of Digital Colony, and Ufinet, which is backed by Italy’s Enel SpA, both plan to make bids for the business, they said.

Oi is planning to sell as much as 51% of its subsidiary, known as InfraCo, with a value for the whole company of at least 20 billion reais ($3.6 billion).

Representatives for Oi, the Canada Pension Plan, BTG and Digital Colony declined to comment. Ufinet didn’t immediately respond to a request for comment outside of business hours.

Oi has been working to pare down its operations while under bankruptcy protection. The struggling carrier raised 1.4 billion reais with the sale of towers and data centers last year. It also announced the signing of a deal with Brazil’s regulatory agency Anatel reducing the fines it need to pay by half, to 7.2 billion reais.

In December, Oi got approval from Rio de Janeiro Justice to sell its mobile-phone business to Telefonica SA, Telecom Italia SpA and America Movil SAB for 16.5 billion reais, but the deal still needs to be cleared by Anatel and the antitrust body Cade.

The minimum price of 20 billion reais for InfraCo is “just a start” and was set after the telecom operator received many nonbinding proposals, Oi Chief Executive Officer Rodrigo Abreu said in an interview in August. At the time, he said he saw “huge” growth prospects for the company, adding that it could be valued up to 30 billion reais.

After receiving the binding proposals for InfraCo, Oi will schedule an auction to sell the asset.

Oi’s voting shares rose 156% in Sao Paulo last year.

Brazil’s biggest landline carrier has been trying to push through a major debt restructuring since filing for bankruptcy protection in 2016. Oi, which has seen losses mount since 2019, divided its assets into five units. Proceeds from its divestments will be used to repay debt and fund the expansion of its broadband fiber network.

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