Telefonica (BME:TEF) Brasil (NYSE:VIV) S.A. (B3: VIVT3; NYSE: VIV), a leading telecommunications company with a market capitalization of $13.2 billion, announced today the cancellation of 21,944,664 common shares, which were previously held in treasury. This move, approved by the company's Board of Directors, represents 1.33% of its capital stock. According to InvestingPro analysis, the company maintains a strong financial health score and is currently trading below its Fair Value.
The shares were acquired as part of Telefonica (NYSE:TEF) Brasil's Share Buyback Program and their cancellation will not reduce the company's capital value. Following this cancellation, the total capital stock of Telefonica Brasil is now divided into 1,630,643,696 common shares. The company also disclosed that a Shareholder’s General Meeting will be scheduled in the future to amend the total number of shares constituting the capital stock as outlined in the company's Bylaws.
This information is based on the latest 6-K form filed with the United States Securities and Exchange Commission, which serves as a report of foreign private issuers pursuant to rules 13a-16 or 15d-16 under the Securities Exchange Act of 1934.
Telefonica Brasil's decision to cancel these shares and the forthcoming adjustments to its Bylaws reflect ongoing corporate governance actions and capital management strategies. The company's Chief Financial Officer and Investor Relations Officer, David Melcon Sanchez-Friera, confirmed these details in a statement issued from the company's headquarters in São Paulo.
Investors and stakeholders can anticipate the convening of a General Meeting to address the adjustments to the Bylaws, ensuring that the capital stock reflects the updated share structure. Additional information and future updates will be available through the company's investor relations channels.
The company's actions are part of its commitment to managing its capital efficiently and upholding transparent communication with its shareholders and the broader market.
In other recent news, Telefonica Brasil has been making significant strides. The company announced a capital reduction of R$2 billion, which will decrease its share capital from R$62.07 billion to R$60.07 billion. This development will not involve the cancellation of shares, but will return funds directly to shareholders, with the payment expected to be made by July 31, 2025.
Simultaneously, Telefonica Brasil has reached a regulatory agreement with Brazilian authorities, allowing the company to transition from its current service model.
The company signed a Self-Composition Agreement with the National Telecommunications Agency (ANATEL), the Federal Court of Accounts (TCU), and the Federal Union through the Ministry of Communications. This regulatory milestone is expected to provide the company with greater operational flexibility.
In addition to these developments, the company received unanimous approval from the TCU for the adaptation of its existing Switched Fixed Telephone Service (STFC) Concession Contracts into Authorization Instruments. This approval is expected to align Telefonica Brasil's operations more closely with current market dynamics and regulatory environment.
Lastly, the company held its Q3 2024 earnings call, led by CEO Christian Gebara and CFO David Melcon. During the call, the executive board expressed confidence in the company's business prospects, indicating a positive outlook for the future. However, they acknowledged potential risks and uncertainties tied to macroeconomic scenarios and industry-related factors.
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