Brazil: Oi says merger target hid debts

Brazil wireless operator Oi is claiming that Portugal Telecom failed to disclose debts until after the companies already merged, reports say.

Portugal Telecom reportedly did not notify Oi of its investment in the holding company of a major shareholder, which is under investigation for financial irregularities. Portugal Telecom acquired $1.22 billion in debt from the company, Rioforte, which is owned by one of Portugal Telecom’s largest shareholders.

That shareholder, the Espirito Santo banking family, is reportedly being probed in Luxembourg for irregularities.

Analysts say the debts are worth about 40 percent of Portugal Telecom’s market value.

The two companies are in their final stages of a merger that first began to consummate earlier this year.

Full content: MSN

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