July 22 (Bloomberg) -- Oi SA, the Brazilian phone company that is projected to return the industry’s highest dividend yield, surged for a third day after it raised $1.1 billion in asset sales last week.
The preferred shares rose 16 percent to 4.59 reais at the close of trading in Sao Paulo. They have climbed 32 percent in the past three sessions, the steepest gain in such a period since September 1998. The rally, the biggest on the Ibovespa, pared Oi’s loss this year to 45 percent.
Oi said on July 15 that it sold its undersea cable subsidiary GlobeNet to Grupo BTG Pactual for 1.75 billion reais ($788 million) and agreed to transfer the use and commercial rights of 2,113 towers to SBA Communications Corp. for 686.7 million reais. The asset sales shored up funding for a company that has pledged to pay out 2 billion reais to shareholders this year, invest 6 billion reais in infrastructure and reduce its 27.5 billion reais in debt, the most among local peers.
The Rio de Janeiro-based company is rallying after the asset sales improved its cash position, Fernando Goes, an analyst at Sao Paulo-based brokerage Clear Corretora, said in a phone interview. “And the stock was so heavily beaten,” he said. “But I’m not sure this is a turnaround point.”
The stock’s 12-month dividend yield is projected to be 20.6 percent, the most among 105 phone companies with a market value of $3 billion or more, according to data compiled by Bloomberg. A company’s dividend yield is the amount returned to investors as a proportion of its share price.
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