Oi SA, Brazil’s biggest landline phone company, agreed to sell assets including towers and undersea cables, raising 2.43 billion reais ($1.07 billion) to replenish its dwindling cash balance.
Oi will sell 22,500 kilometers (14,000 miles) of submarine cables to an investment fund run by Grupo BTG Pactual for 1.75 billion reais, according to a statement today. It also agreed to transfer the use and commercial rights of 2,113 towers to SBA Communications Corp. for 686.7 million reais.
The deals help shore up Rio de Janeiro-based Oi’s finances as it spends the most among peers this year on infrastructure improvements, with a budget of about 6 billion reais. Chief Executive Officer Zeinal Bava, who joined the company last month, has yet to announce whether he’ll maintain the company’s pledge to pay 1 billion reais in dividends in August.
Oi closed the first quarter with a net debt-to-earnings ratio of 3.05, compared with an average of less than 1 for Latin American telecommunications companies, according to data compiled by Bloomberg. The company is scheduled to report second-quarter results on Aug. 14.
Oi jumped 9.9 percent to 3.67 reais at the close in Sao Paulo, the biggest one-day gain since June 4. The shares have slid 56 percent this year.