Oi Hires Credit Suisse to Sell Call Centers Employing 19,000Christiana Sciaudone
Oi SA, the most indebted telecommunications company in Brazil, hired Credit Suisse Group AG to sell its call centers, which employ 11 percent of the total workforce, said Chief Executive Officer Bayard Gontijo.
The sale would be the latest asset disposal as the Rio de Janeiro-based company attempts to decrease its leverage and rebuild its credibility. Oi, the smallest wireless and largest fixed-line carrier in Brazil, is positioning itself as a stronger candidate to participate in consolidation, be it buyer or seller, Gontijo said in an interview Monday at Bloomberg’s New York headquarters.
“What we want for the future is to regain our investment grade,” Gontijo said. “We have to work doing structural changes, transforming the business, selling assets, reducing the leverage. It’s a process.”
Gontijo, who in October became Oi’s third chief executive in less than two years, has embarked on a turnaround to improve operations and help refinance debt. The sale of the call centers, which have 19,000 employees across Brazil, should close in the next three months, the 43-year-old CEO said, declining to provide a value for the deal.
Oi fell 0.3 percent to 5.88 reais at 11:13 a.m. in Sao Paulo trading.
Oi is set to get approximately 19 billion reais ($6.2 billion) over the next 30 days from the sale of its Portuguese assets to billionaire Patrick Drahi’s Altice SA. Those assets came from a merger with Portugal Telecom SGPS, announced in October 2013.
Financial results improved last quarter. Oi’s earnings before interest, taxes, depreciation and amortization rose 13 percent to 1.9 billion reais from a year earlier, which was also 13 percent above estimates. Operating costs fell by 4.9 percent in that time period, according to a regulatory filing.
At the end of the first quarter, Oi had a ratio of net debt to earnings before interest, taxes, depreciation and amortization of 4.17, compared with 0.62 for rival Tim Participacoes SA, according to data compiled by Bloomberg. The ratio for Telefonica Brasil SA, another competitor, stood at
0.30 in the fourth quarter.
Oi has 17,000 direct employees. Including indirect workers, the total comes to 180,000.
Credit Suisse declined to comment.
Oi’s African assets, also acquired through the Portugal Telecom merger, remain for sale as the company negotiates a dispute to release almost 400 million euros ($450 million) in dividends being held in escrow.
“Our intention is to sell the assets,” Gontijo said. If there isn’t a sale, Oi will continue receiving annual dividends, “which is not bad for us. This is a company that generates cash.”
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