GIC invests R$2.2 billion in tele’s fiber optic spinoff, says website

Hi (OIBR3): GIC closes investment of R$2.2 billion in tele's fiber optic network, says website
Hi (OIBR3). Photo: Disclosure

The GIC, sovereign fund of Singapore, agreed an investment of R$ 2.2 billion in the fund that controls V.tal, the brand of Hi (OIBR3) which relies on the telecommunications company’s fiber optic assets. The information is from the Brazil Journal.

In July, Oi sold 58% of the capital of V.tal, known as InfraCo, to the fund structured by BTG Pactual (BPAC11) for R$ 12.8 billion. The operation valued the company at R$ 20 billion.

According to the Brazil Journal, in addition to the investment of the GIC, the fund raised R$ 4 billion from individual clients in the wealth area of ​​the BTG. The minimum ticket was BRL 20 million and the average ticket was BRL 70 million. The vehicle and bank partners completed the total.

V.tal, controller of a network of optical fiber with almost 400 thousand kilometers, it will be born with an Ebitda (earnings before interest, taxes, depreciation and amortization) of R$ 1.6 and a debt of zero. The projection is that Ebitda will reach R$ 5 billion in 2026.

Despite this, the deal foresees a capex of BRL 30 billion by the end of 2030. In practice, this results in an average investment of BRL 6 billion per year, starting next year

The brand will also have to pay a dividend of R$ 2.4 billion to Oi, 90 days after the closing of the transaction, scheduled for the beginning of 2022.

V.tal is an infrastructure provider for other operators and ISPs. Oi does not have the right to operational interference in the company, does not appoint directors, nor does it have access to the pricing of services.

According to Rodrigo Abreu, CEO of Oi, there is the ability to generate a margin of 40 to 50% of V.tal’s Ebitda, with multiples of 10 to 15x. This should be an important factor to generate more value back to Oi.

Hi quote today

The action of Hi closed the trading session this Monday (13) up 4.08%, at R$ 1.02.