By Brad Haynes
(Reuters) - Brazilian telecom group Oi SA is reconsidering the sale of its African assets as relations improve with an estranged partner, Chief Executive Bayard Gontijo said on Monday.
Gontijo said a 25 percent stake in Angolan mobile operator Unitel is still booked as an asset available for sale, but Oi is working to patch up relations with partner Isabel dos Santos.
"We're working with two scenarios. One is selling the asset," Gontijo said during an interview in New York while on a U.S. roadshow with investors. "The other one is fixing those old disputes ... in a structure where we have the shareholders' agreement respected by both sides and we can then consolidate Unitel's numbers."
If the latter happened, the Angolan asset would contribute to Oi's annual earnings before interest, taxes, depreciation and amortization, he said. An agreement could also give access to dividends that dos Santos has blocked for over a year, due to a dispute that began with Oi shareholder Portugal Telecom SGPS. Oi gained control of the Angolan asset last year when it merged with Portugal Telecom.
"We are changing the centre of gravity from Lisbon to Brasilia," Gontijo said, adding that relations with Isabel dos Santos, the daughter of Angolan President Jose Eduardo dos Santos, were "improving and evolving."
Gontijo pointed out that Brazil's state development bank BNDES, a major shareholder and creditor of Oi, has strong relationships in Angola.
In December, Gontijo said he planned to sell the Unitel stake by the end of 2015. But as his turnaround strategy has boosted Oi's operating margins and cash flow, Gontijo said he is taking a more patient approach to big deals, including a potential tie-up with a rival in Brazil's telecom market.
Last year, Oi hired investment bank BTG (LONDON:BTG) Pactual to negotiate a bid to acquire Brazilian mobile carrier TIM Participações and split it three ways with the local units of Telefonica (MADRID:TEF) and America Movil.
"I cannot say if the consolidation is going to be in 2015, 2016 or 2017," said Gontijo. "Let's not put a deadline on it, because the stronger we get in terms of the turnaround, the stronger we are going to be to sit down with our peers for a consolidation."