Monday, October 20, 2014

EN hit historic lows and worth less than € billion – Reuters

EN hit historic lows and worth less than € billion – Reuters

                 


                         
                     

                 

 
                         

The shares of Portugal Telecom (PT) closed this Monday losing 10.05% to 1.09 euros after, in the morning, have been skidding more than 28% to a record low of 0 , 87 euros, which put market capitalization below € billion.

                     


                         It was not until late morning that the securities of telecommunications carrier began to recover from the previous fall, but without being able to ever get into positive territory. The main index of the Lisbon stock exchange, the PSI 20, came to be losing almost 1.5%. but eventually closed with a decline of 0.17%, benefiting from the gains of banking.

A sharp drop in Portugal Telecom was heavily influenced by the decision of the Court of Commerce of Luxembourg, which did not accept the controlled management ( Contrôlée gestion ) of Rioforte Investments SA, where the telecom operator has a credit of approximately EUR 900 million.

With the decision of the court, for settlement Rioforte follows, which should make it harder to credit recovery. If not regain credit, PT gets its stake in Hi merger with Brazilian reduced to 25%.
If he could recover the money lent to Rioforte, participation in Hi would rise to 37%.

With the verified drop this Monday, capitalization PT fell to € 977 million, which in practice corresponds to the 25% it holds in Hi. Ie, investors incorporate the company recover anything from Rioforte when until a few days ago, admitted recover at least 30% of the value in question.

Last Friday, PT shares had already lost 9% on a day that already incorporating the information concerning the Rioforte, Morgan Stanley, one of the advisors of the Altice process that may result in the purchase of PT Portugal, resumed coverage of national telecom with a lower target price by 38% to the current share price. announced that it would follow the Portuguese company, with a target price of 0.79 cents, almost 40% below that COTAVA the final stretch this week.

A note research of Morgan Stanley, which is one of the advisors Altice, one of those interested in purchasing the assets of PT, already integrated in HI, and at a time when no investment house is monitoring the company raises doubts in the market.

The law does not prohibit this, since the conflict of interest is assumed in the evaluation report, as will be the case, but the coincidences do cause some strangeness in the market, at a time when the company has been the subject of short sales, called short selling – that the CMVM decided to ban the session this Tuesday. This is a sale of shares not have asked or borrowed, with the expectation of the repurchase at a lower price.

The sale of shares of PT force was visible in the early hours session, when the shares fell 28%. The strong volume, over 55 million titles may also have been influenced by mechanisms stop loss , which determines the automatic sale of securities when certain limits are reached losses. Noted that PT shares were much of the session below the value of 1 euro.

In a statement sent to the Committee last Securities Market Commission (CMVM) week, the HI reports that Banco BTG covenant “was contacted by several interested parties (among which Altice) to obtain selected information on the business of PT Portugal, SGPS, mainly on its operations in Portugal so they could eventually formulate proposals for the acquisition of such operations or part of their non-strategic assets. “

In the same statement, the Hi relates that Banco BTG Pactual SA is” financial advisor hired as commissioner to develop viable alternative structures and funding to provide a holding company as the protagonist in the consolidation of the telecommunications sector in Brazil. “

                     
 
                     
                 

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