Oi tumbles after pricing stock offering; PT also off

|By:, SA News Editor

Ahead of its merger with Portugal Telecom (PT -2.6%), Oi (OIBR -12.8%) is selling 2.14B common shares (inc. 397M ADS') and 4.28B preferred shares (inc. 829M ADS). The common ADS is being offered at $0.97 (below yesterday's close of 1.04), and the preferred ADS at $0.894.

Proceeds are expected to total $5.87B. PT will be buying R$5.7B ($2.59B) worth of shares through the offering.

Oi aims to use the offering to buy out the debt of controlling shareholder Telemar Participacoes, and to simplify its ownership structure so that each shareholder has an equal vote.