Feb. 27 (Bloomberg) -- Tele Norte Leste Participacoes SA plans to resume investments and establish a new dividend policy after shareholders today approved a plan to simplify the structure of Brazil’s second-largest telecommunications company by revenue.
Telemar Norte Leste SA, Brasil Telecom SA and Tele Norte Leste shareholders submitted their votes in separate meetings this morning in a fourth attempt to alter the structure of the group, which operates under the Oi brand. Minority shareholders had vetoed the three previous proposals.
Brazil’s securities regulator, known as CVM, this time rejected all 10 complaints registered by minority investors and allowed controlling shareholders to vote.
“It is positive for the group, as it simplifies the structure,” Fator SA Corretora de Valores analyst Jacqueline Lison, said in a telephone interview. “Now the company can focus on the operational performance.” Fator has a “maintain” recommendation on Tele Norte Leste and Telemar Norte Leste shares.
The company, which will be called Oi SA after the restructuring, will announce its new investment plan and its new dividend policy on April 17, at the Oi Investors Day, Chief Executive Officer Francisco Valim said in a conference call with journalists today.
As a result of the restructuring, the three public companies, which currently have seven classes of shares, will be replaced by a single company with two types of shares, traded on the BM&FBovespa SA exchange in Sao Paulo and the New York Stock Exchange.
Oi expects the restructuring to generate 100 million reais ($58.6 million) of savings per year, Chief Financial Officer Alex Zornig said in the call.
Telemar Norte Leste SA’s shares fell 1.1 percent to 41.72 reais at trading in Sao Paulo, while Tele Norte Leste Participacoes SA rose 2 percent to 18.02 reais. Brasil Telecom SA rose 2.7 percent to 11.27 reais.
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