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Case OI/BrT


Years: 2006, 2008, 2009, 2010 and still ongoing

In this recent case, the minority shareholders’ rights should be respected in a number of areas: in the establishment of the exchange value proposed for the conversion of papers; in the very way in which the process was conducted for the definition of the exchange value; in the different forecasts made on the company’s ability to generate revenue; and in the evaluation model used.

With the announcement of the most recent attempt to restructure the Oi Group in May 2011, BrT’s minority shareholders started a battle to block the attempted corporate restructuring of the Group, which includes BrT’s possible merger of TMAR and TNL shares, with the probable imposition of damages upon these minority shareholders through the exchange ratio proposed for the conversion of papers.

In order to establish the exchange value, the value only the market prices of all share classes were taken into consideration. This guideline was unfair and inappropriate according to BRT minority shareholders, since it takes into account the period in which the company’s shares were suffering the effects of the speculations concerning the restructuring, which caused the share prices  to drop in value significantly.

In addition to the guideline itself, the minority shareholders are also questioning the way the process was conducted to define the exchange ratio. This is because the controlling shareholder  announced to the market what it believed the best exchange ratio to be used, even before the independent committee had been summoned or even started its work (considering that this committee’s role is exactly to establish this ratio). This move suggests that the special committee was created simply to confirm the exchange ratio previously established by the controlling shareholder, who, according to the CVM, misunderstood its purpose.

Still under evaluation by BrT, the minority shareholders are questioning different forecasts made concerning the company’s ability to generate income. A financial analysis, prepared by Itaú BBA to provide support to the Oi Group’s financial committee, includes the Ebitda forecast for BrT for 2012: R$ 2.73 billion. An expert report, developed by the Apsis consultants and used by Oi in 2011 for the assembly approval of the purchase of control of BrT, includes a much more optimistic Ebitda forecast for BrT in 2012: R$ 4.55 billion.

Another issue raised by the minority shareholders concerns the evaluation model and projections  (that the Oi Group forwarded to the Itaú and BradescoBBI banks) which ignore the regional differences in the Brazilian telephone market and distort BrT’s economic evaluation. The data provided by Oi suggests, for example, that the average receipts (ARPU) generated by users in 2020 in the Northeastern and Northern regions will be identical to those found in the Central-Southern region (the focus of operations by the old Brasil Telecom company). This information defies logic since the income per capita in the Central-Southern region is far higher than that of other areas of the country.


This is already a well-trodden battlefield. Since 2006, TmartPart, the controlling shareholder of the Oi Group, has tried to simplify its complex corporate structure, but its proposals have been rejected by minority shareholders who believe that the proposals were unfair and unequal.

The first attempted restructuring which the minority shareholders refused, in April 2006, sought the inclusion of the company on the ‘Novo Mercado’ (with the controlling shareholder receiving a significant premium) and, at the same time, the secondary sale of the controlling shareholders’ share. The restructuring again failed to move forward in July 2007, when the company attempted to purchase the minority shares from TMAR and TNL, but had their offers rejected.

Another attempt sank without trace in 2010, when the controlling shareholders in the Oi Group tried to migrate BrT’s minority shareholders over to TMAR, but a majority of them disagreed with the proposal, due to a reduction in relation to the original proposal concerning the exchange ratio of their shares - due to the creation of provisions within BrT of R$ 1.3 billion.


Read more about it:



FR 29aug2011.pdf

FR restructuring – May 11.pdf

Expert Report_Bradesco.pdf

Expert Report _BTG.pdf

Expert Report _Itaú.pdf

mkt cap - tables brt and tmar.xlsx

committee proposal – 1aug.pdf



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