Oi SA surged the most in two months after saying it’s cutting more than 1,000 jobs and bolstering shareholders’ rights to help turn around Brazil’s most-indebted telecommunication company.
Personnel expenses were reduced by 20 percent as part of a 2015 plan focusing on cost control, according to a statement Wednesday. A day earlier, the board agreed to eliminate a complex controlling structure and give non-voting shareholders the right to convert to voting shares.
The changes to improve corporate governance and financial results will help Rio de Janeiro-based Oi present itself as a potential suitor or takeover target. Brazil’s smallest wireless provider faces increasing competition with fewer new users and a growing need to invest in infrastructure to tap into the demand for wireless data.
Oi rose 16 percent to 5.95 reais in Sao Paulo, the biggest advance since Jan 22. The company had 18,295 employees at the end of 2014, according to data compiled by Bloomberg.
In August, Oi hired Banco BTG Pactual to study taking a possible stake in Rio de Janeiro-based Tim Participacoes SA, a rival wireless carrier. In November, Milan-based Telecom Italia SpA, which owns 67 percent of Tim, authorized the unit to explore a potential transaction between Tim and Oi.
At the end of the fourth quarter, Oi had a ratio of net debt to earnings before interest, taxes, depreciation and amortization of 3.45, compared with 0.27 and 0.30 for rivals Tim and Telefonica Brasil SA, respectively, according to data compiled by Bloomberg.