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Telesp to get $17bn financing for Vivo deal
22 June 2010
Telefónica’s Brazilian offshoot Telesp has been offered $17bn funding for its buyout of Portugal Telecom’s share of mobile operator Vivo
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Telefónica
Vivo
Brazil
Telesp
Portugal Telecom
Brazil’s Telesp, controlled by Telefónica, has been offered financing worth $17 billion to acquire wireless carrier Vivo, according to reports. Five Brazilian banks offered the funds to Telesp after Telefónica agreed to buy out Portugal Telecom’s stake in a joint venture that controls Vivo for $7.8 billion. Portugal Telecom had earlier rejected a $7 billion offer for its stake in Vivo.
It will use the funds only if Telefónica requires Telesp to pay for the Vivo acquisition. Telesp will partly borrow the money in syndicated loans and ask the banks to sell commercial paper and two, three- and five-year real-denominated notes on its behalf in the domestic debt markets.
A Telesp-Vivo merger will create the biggest Brazilian telecoms company. The acquisition of Vivo will help Telefónica boost its presence in Brazil and save billions of dollars by combining its fixed-line business with a wireless venture. GTB