The consequences of the deal whereby TIW has sold its stake in Telemig Celular and Amazônia Celular to Opportunity are far more significant than appears from the brief announcement issued by the two carriers and the holding companies that control them, Newtel and Futuretel. The notice details only the mutual agreement to withdraw all lawsuits. One of the most important effects of the deal is that the pension funds are isolated on the board of Brasil Telecom. Having won a voting majority on the board of BrT thanks to its acquisition of TIW?s stake, Opportunity can now move ahead with buildout of a wireless network covering the South, North, Center-West and Minas Gerais. It will also be able to offer service to the Northeast, Rio de Janeiro, Espírito Santo and São Paulo State via a network-sharing agreement with Vésper announced earlier this week.
Opportunity will also probably succeed in eliminating one of the legal problems it faces in Cayman, where TIW won a court ruling that restricts investment by CVC Opportunity and Opportunity Fund in Brazil. This lawsuit will presumably be withdrawn as well, along with a suit filed in Brazil against the incorporation of Newtel, where Opportunity is locked in a dispute with the pension funds.
Sources close to the pension funds say they aren?t at all surprised by TIW?s decision to sell out to Opportunity. The funds were even examining the possibility of making their own offer for TIW?s interest in Telemig, but delays due to bureaucracy and the changeover to a new Federal Government put paid to that idea. Previ, Opportunity?s main adversary in the dispute at Newtel, can do little but to await the outcome of other lawsuits filed against Opportunity in Cayman, as well as investigations in Brazil by CVM, the securities and exchange watchdog, and public prosecutors. Sérgio Rosa, Previ?s new president, recently promised to review the fund?s key equity holdings but he may find it hard where Opportunity is involved. The financial service group led by Daniel Dantas apparently holds all the cards and the pension funds have little bargaining power to fight for a satisfactory valuation of their positions.
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