It has finally been voted through, ending weeks of speculation and share-price jitters. But what does the €7.4 billion sale of Portugal’s national telecommunications operator Portugal Telecom to French operator Altice really mean?
According to newspapers this morning, the first plus point is that the historic low reached by shares rose almost 24% to finish the day at €0.792. This is still considerably less than they were worth even after the disaster of PT’s “lost” loan of €900 million to BES subsidiary Rioforte, but it was a movement at last in the right direction.
And that is what this sale is all about. The disasters of the past, which have seen PT’s offices stormed by PJ anti-corruption investigators (see: http://portugalresident.com/pj-anti-corruption-squad-hones-in-on-pt-and-...), cannot be corrected. It is now about looking forwards. Both Público and the Wall Street Journal carry detailed articles this morning on how Altice has big plans for the Portuguese market.
Despite worries expressed by the workforce - members of which waved protest banners outside PT’s headquarters in Lisbon yesterday as the general assembly discussed the sale - Altice boss Patrick Drahi’s ambition is to become “a key competitor in the country next to Vodafone Group PLC and NOS”, reveals WSJ.
Agreement for the sale nonetheless took its time as small shareholders aired their grievances, almost all trying to annul the catastrophic merger with Brazilian operator Oi.
But by dinner time last night (Thursday), the deal was signed with economy minister Pires de Lima telling Público: “As PT is a company that is relevant in the Portuguese economy, and which gives work to more than 10,000 people, it was important that there is clarification as to it future.”
Altice is “welcomed”, he said, because “we have to nurture foreign investors and not denigrate them”.
“An investment of €7.4 billion in a Portuguese company is not irrelevant, whoever the investor,” he added.
The tragedy is that the money paid for the operator will revert to Oi who suffered dramatic losses as a result of the merger last year.
Speculation now is whether Oi will use the value of the sale to pay its debts or invest in another business. As Público highlights, the executive president of Oi was “many times the target of the fury and criticisms of small investors” but he maintained the mantra that the sale was “the best for the two companies” as Oi will be able to reduce its debts and PT “will continue offering an excellent service in Portugal”.
National tabloid Correio da Manhã featured the sale in its “Figure of the Day” section, along with a photograph of Prime Minister Passos Coelho looking very uncomfortable.
“Sócrates opened the door to disaster when he forced PT into business with Oi, but the government of Passos was wrong to wash its hands of the deal and deliver one of Portugal’s flagship companies into the hands of Altice,” ran the text.
The sale now has to receive regulatory approval (as Altice already has a small presence in Portugal via operators Cabovisão and Oni). According to WSJ, it is expected "to close in the first half of the year".
This news story was reproduced with kind permission of the Algarve Resident. For more news, see www.portugalresident.com.
