BTG Pactual buys controlling stake in Oi’s InfraCo

As expected, BTG Pactual won the auction for the optical fiber business of Brazilian telco Oi.

Through the BTG Pactual Real Savings and Equities fund and BTG's GlobeNet fiber cable subsidiary, the largest investment bank in Latin America bought 57.9% of Oi's fiber unit InfraCo for 12.9bn reais (US$2.46bn).

The auction took place on Wednesday and was streamed by the Rio de Janeiro court overseeing Oi's judicial recovery process. The bank had taken the lead in the process when Oi accepted its binding offer in April, giving it the right to match the highest bid at the auction. 

READ OUR LATEST ICT REPORT: How Fiber and Towers are Driving the Telecom Infrastructure Market

GlobeNet will be merged into InfraCo, which is expected to become a wholesale fiber operation to be leased by other telcos and internet service providers. GlobeNet owns and operates an underwater fiber cable network spanning some 23,500km that serves customers in North and South America, in addition to datacenters in Colombia and Brazil. 

"They came out with a solution for a peculiar asset [GlobeNet], in which they were losing money, but which is still worth a lot," an executive from a telecom company that decided not to participate in the auction, and who asked to remain anonymous, told BNamericas.

Before the binding offer, US fund Digital Bridge (former Digital Colony), owner of Brazil's telecom infra company Highline, made a proposal for Oi's assets. But the fund did not come up with a bid during the auction, and no other offers were on the table. 

BTG will pay for infraCo in three installments. The first installment of 3.27bn reais will be paid upon the closing of the deal.

In a consortium with Facebook, GlobeNet also recently launched the Malbec cable, a 2,500km route connecting Rio de Janeiro and São Paulo to Buenos Aires in Argentina.

Oi, which owns over 400,000km of fiber networks deployed throughout Brazil, will be InfraCo's anchor client.

The proposal also restructures Oi's debt with Globenet, from whom it currently contracts submarine data traffic. Oi sold GlobeNet to BTG Pactual in 2013 for 1.78bn reais. Oi's debt with GlobeNet currently stands at 3.74bn reais.