Transaction led by Brookfield Asset Management (“Brookfield”), a leading global alternative asset manager, with participation from Farallon Capital Management, a global investment fund and Prisma Capital, an alternative assets investment manager.
Capital raised via this debenture issuance will support the deployment of Infraco’s fiber optic network across Brazil. InfraCo was constituted in accordance with Oi’s Judicial Recovery Plan.
Oi announced, through a material fact notice, the issuance of convertible secured debentures by Brasil Telecom Comunicação Multimídia S.A. (BTCM). BTCM is a wholly owned subsidiary of Oi which was constituted as the group’s fiber infrastructure unit (InfraCo), and is raising up to R$ 2.5 billion from this issuance.
This transaction represents a key milestone for the company in securing the capital flexibility to pursue the reorganization plan approved by its creditors. The financing will support InfraCo´s expansion of its Fiber to the Home (FTTH) network and the continued deployment of the largest fiber optic infrastructure network in Brazil. Proceeds of the financing will also support the structural separation of Oi and InfraCo as approved in Oi’s judicial recovery plan amendment.
As also communicated to the market, the subscription of the debentures will be led by Brookfield, a leading global alternative asset manager, with participation from Farallon Capital Management a global investment fund and Prisma Capital. Brookfield has approximately US$ 600 billion in assets under management in over 30 countries, including long term investments in infrastructure, real estate, renewable power, private equity and credit. Brookfield is investing in the transaction through its Special Investments program.
“For Oi, having the participation of two leading global financial institutions in the financing of InfraCo, demonstrates that the market has recognized the enormous potential of the neutral network model we have designed under our structural separation proposal. The issuance of the debentures secures significant capital for the investments planned for this year at InfraCo, supporting the continued fiber expansion process lined out in our strategic transformation plan”, highlights Rodrigo Abreu, Oi’s CEO.
“We are excited to partner with Rodrigo and the Oi team on this next phase of their transformation to become the dominant digital infrastructure platform in Brazil,” said Angelo Rufino, Managing Partner of Brookfield Asset Management. “Oi is at the center of Brazil’s rapidly increasing adoption and demand for greater fiber intensity and we look forward to leveraging Brookfield’s long history of infrastructure investment and relationships in Brazil to support this growth.”
“The neutral network business model it will be transformational and will foster the competitiveness and development of the telecom sector in Brazil”, said Daniel Goldberg, Managing Partner of Farallon Latin America. “We are financing the first large scale infra company that will make its network available to the different telecom players. We believe that the proposed business model is very advantageous for all Oi stakeholders and for the country. We are very proud to support the creation of InfraCo”.
In parallel to this operation, Oi continues to negotiate, in exclusivity, the possibility of reaching an agreement to grant preference rights (“stalking horse”) in the sale of InfraCo UPI’s controlling stake to investment funds which have presented a binding offer for this purpose, in accordance with the competitive process part of the judicial reccovery plan amendment homologated in Oct/2020, as communicated to the market through recently issued Material Facts.
