Oi falls on negative view in Goldman's Portugal Telecom downgrade

Brazilian telco Oi (OIBR -4%) is falling after Goldman aims a spotlight on the company's Q2 results in its downgrade of Oi parent Portugal Telecom (PT -1.8%).

Analyst Tim Boddy: "Much weaker-than-expected 2Q results in Brazil leaves Oi with little room for error to remain within financial covenants and avoid the need for more capital. While Oi’s CEO has a strong track record that gives us confidence for an operational turnaround, and we still view PT’s domestic operations as structurally attractive (albeit with rising NT competitive risk from Vodafone) we now see this outweighed by financial risk."

Portugal Telecom is facing significant debt problems of its own.

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