Sources say the new debenture issue worth 190 million Brazilian Reals approved by the board of Splice is partly for Fixtel, a wholly-owned subsidiary, to pay its share of BCP?s bank debt. Fixtel owns 6.84% of BCP?s voting shares (ON) and 2.87% of preferred (PN), so its share of the debt is 25.65m US Dollars (now about 77m BRL). BCP has defaulted on 375m USD. A very well-informed source says Splice aims to maintain the integrity of its position in the B-band cellular operator when negotiations with creditors reach a conclusion. The other major shareholders are divided on the matter of repayment. Safra and Splice are in favor, BellSouth against. Splice prefers to pay its share and then sell on advantageous terms, probably to Telecom Americas. Equity analysts and traders suspect the new debentures will eventually be purchased by Tele Centro Oeste Celular, another subsidiary of Splice, whose debts to TCO would thereby jump to 600m BRL. This expectation explains the massive selloff of TCOC Wednesday, August 14. At one point the stock was off 19% but it closed down 17% on 2.76 BRL at the end of normal trading.
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