NEW YORK-The government of Portugal said its sale of a 13.5-percent equity stake in Portugal Telecom plc and an associated share rights issue raised $1.62 billion.
Contributing to the capital raised was the concurrent one-for-10 rights issue to existing PT shareholders. This allowed them to exchange one share of the stock they already held for 10 shares of the newly issued equity, purchased at a discount from the public offering price.
In this latest phase of the carrier’s privatization, which began in 1994, the sale of 42.1 million shares reduced the government’s stake to 10 percent.
Fernando Teixeira dos Santos, Portugal’s Secretary of State for the Treasury, said the federal government would apply the $960 million it realized from the sale toward national debt reduction.
Portugal Telecom, whose stock is listed on the New York Stock Exchange, will use proceeds it gained from the offering to repay its debt and for general corporate purposes. The new shares began trading July 12.
PT, which offers wireline and wireless services, is expanding into Brazil and North Africa. It is part of the Medi Telecom consortium, which announced July 6 its bid of $902 million was the winner for the second Global System for Mobile communications license in Morocco.
By early next year, Medi Telecom hopes to begin offering commercial service on the first phase of a GSM network. Within five years, the consortium plans to cover 92 percent of the population of Morocco, where wireless penetration today is less than half a percent.
In Portugal, PT has about 3 million cellular customers and is the largest of the three wireless carriers in the country.
Starting next year, Portugal Telecom’s fixed wireline business will be open to competition for the first time. With this in mind, PT said it plans to reorganize its operations so each business unit is focused on a single telecommunications sector.
“This is intended to allow the company to manage costs and maximize revenues of business lines more effectively, as well as enhancing measurement of performance,” PT said in a release.
