Billionaire Sawiris Expresses Interest in Brazil Carrier Oi

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Naguib Sawiris.

Photographer: Simon Dawson/Bloomberg
  • Egyptian says Oi has great potential once debt restructured
  • Says merger with Telecom Italia’s local unit makes sense

Egyptian billionaire Naguib Sawiris said he’s prepared to invest in Oi SA, the Brazilian wireless carrier that filed for bankruptcy protection on $19 billion in debt this week.

Sawiris, who controls a majority stake in Egypt’s Orascom Telecom Media and Technology Holding SAE, said Oi has great potential once its debt is restructured and provided the company gets a capital increase and a strong industrial plan. Egypt’s second-richest man is ready to invest if he’s granted exclusivity for talks, he said in an interview Tuesday.

“Oi needs a shareholder with a strong telecoms background to solve their operational problems in addition to their financial ones,” Sawiris said by phone.

Sawiris isn’t the only foreign billionaire who has showed interest in Oi, the most indebted phone company in Brazil. In February, Russia’s Mikhail Fridman withdrew a proposal to help finance a merger between Oi and Telecom Italia SpA’s Brazilian unit, Tim Participacoes SA. Oi filed for bankruptcy protection on Monday after failing to reach an agreement with creditors following a series of mergers and leadership changes that failed to help the carrier get on solid financial footing.

Sawiris said that a merger between Oi and Tim Participacoes makes “a lot of sense,” but that first Oi needs to stand on its own feet. The Egyptian businessman said he would “welcome” a deal with Fridman, a former business partner. Sawiris didn’t specify what shape his investment could take. His interest in buying Oi was first reported by Estado de S. Paulo columnist Sonia Racy.

Oi sought protection from creditors so it could keep serving customers, the company said in its filing Monday. Talks with creditors stalled last week after some board members disagreed with a plan by bondholders to swap debt for equity, giving them 95 percent of the company and leaving current shareholders with a 5 percent stake.

Shares of the phone carrier fell a record 30 percent to 69 centavos at 11:26 a.m in Sao Paulo.

Oi was under pressure to seek protection because it has a 231 million euro-denominated ($262 million) bond maturing in almost a month. The filing came 10 days after Bayard Gontijo resigned as chief executive officer after disagreeing with some board members on how to proceed on negotiations with debt holders.

Worth $4 billion, according to the Bloomberg Billionaires Index, Sawiris helped shape Italy’s phone industry. In 2005, he bought wireless carrier Wind in a 12.2 billion-euro deal from utility company Enel SpA and sold it six years later to VimpelCom Ltd., the carrier part-owned by Fridman.

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