As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 7/28/14  Portugal Telecom SGPS SA          SC 13D/A               4:350K Oi S.A.                           Merrill Corp-MD/FA
          Bratel B.V.
          Bratel Brasil S.A.

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13D/A    Amendment to General Statement of Beneficial        HTML    146K 
                          Ownership                                              
 2: EX-1        Underwriting Agreement                              HTML     22K 
 3: EX-2        Plan of Acquisition, Reorganization, Arrangement,   HTML     42K 
                          Liquidation or Succession                              
 4: EX-32       Certification per Sarbanes-Oxley Act (Section 906)  HTML     55K 

 

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D

 

Under the Securities Exchange Act of 1934
(Amendment No. 4)*

 

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

** The CUSIP number is for the American Depositary Shares relating to the Common Shares. No CUSIP number exists for the underlying Common Shares, since such shares are not traded in the United States.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

(1)  Includes (a) 571,455,214 Common Shares of Oi S.A. held directly by Portugal Telecom, SGPS, S.A., (b) 36,367,992 Common Shares held by Bratel Brasil S.A., one of the other Reporting Persons and a subsidiary of Portugal Telecom, SGPS, S.A., and (c) 474,348,720 Common Shares with respect to which Portugal Telecom has a call option, as described in Item 4 of this Statement on Schedule 13D.

 

(2)  Includes the aggregate number of Common Shares of Oi S.A. with respect to which the Reporting Person may be deemed to share voting and dispositive power pursuant to the shareholders’ agreements described in Item 6 of this Statement on Schedule 13D.  The percentage reported in Row (13) assumes that all the Common Shares subject to Portugal Telecom’s call option are outstanding, although the Common Shares subject to the call option are expected to be held in treasury by Oi S.A. and its subsidiaries until the earlier of the exercise or expiration of the call option.

 

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(1)  Represents Common Shares held by Bratel Brasil S.A., one of the other Reporting Persons and a subsidiary of Bratel B.V.

 

(2)  Includes the aggregate number of Common Shares of Oi S.A. with respect to which the Reporting Person may be deemed to share voting and dispositive power pursuant to the shareholders’ agreements described in Item 6 of this Statement on Schedule 13D.  The percentage reported in Row (13) assumes that all the Common Shares subject to Portugal Telecom’s call option are outstanding, although the Common Shares subject to the call option are expected to be held in treasury by Oi S.A. and its subsidiaries until the earlier of the exercise or expiration of the call option.

 

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(1) Includes the aggregate number of Common Shares of Oi S.A. with respect to which the Reporting Person may be deemed to share voting and dispositive power pursuant to the shareholders’ agreements described in Item 6 of this Statement on Schedule 13D.  The percentage reported in Row (13) assumes that all the Common Shares subject to Portugal Telecom’s call option are outstanding, although the Common Shares subject to the call option are expected to be held in treasury by Oi S.A. and its subsidiaries until the earlier of the exercise or expiration of the call option.

 

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Schedule 13D

 

The Reporting Persons are filing this Amendment No. 4 to update the information previously reported in the Statement as a result of the execution of the Second MOU.

 

Item 2.                     Identity and Background

 

As previously reported in Amendment No. 3, upon completion of the Oi Capital Increase, PT Portugal, PT Comunicações, MEO and PT Móveis ceased to be Reporting Persons for purposes of this Statement because they are no longer subsidiaries of Portugal Telecom.  A new agreement among the remaining Reporting Persons to jointly file this Amendment and any future amendments to the Original Schedule 13D in accordance with Rule 13d-1(k) of the Securities and Exchange Act of 1934 is attached as Exhibit 1.

 

The last two paragraphs of Item 2 of the Statement, as previously amended, are hereby amended and restated in their entirety as follows:

 

The name, present principal occupation or employment (and the name, principal business and address of any corporation or other organization in which such employment is conducted) and citizenship of each director and executive officer, as applicable, of each Reporting Person is provided on Exhibit 2 to the Amendment, which is incorporated by reference herein.

 

During the last five years, none of the Reporting Persons nor, to the knowledge of the Reporting Persons, any person named on Exhibit 2 (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

Item 3.                     Source of Funds

 

The information set forth in Item 3 of the Statement is hereby amended by adding the following paragraphs at the end thereof:

 

Upon completion of the Oi Capital Increase, including Common Shares issued pursuant to the underwriters’ option to purchase additional shares, the Reporting Persons directly owned 1,082,171,926 Common Shares, or 38.96% of the issued and outstanding Common Shares.

 

Pursuant to the Second MOU, which is described in Item 4 below, Portugal Telecom and Oi have agreed to negotiate in good faith the terms of definitive agreements (the “Definitive Agreements”) pursuant to which Portugal Telecom expects, subject to conditions, to transfer to the Oi Subsidiaries 474,348,720 Common Shares, representing 17.08% of the issued and outstanding Common Shares, and 948,697,440 Preferred Shares in exchange for the Rioforte Investments in the aggregate principal amount of €897 million.  In addition, Portugal Telecom expects to receive the call option to purchase Common Shares and Preferred Shares (or, upon completion of the Merger of Shares, common shares of CorpCo) described in Item 4 below.

 

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Schedule 13D

 

The information set forth in Item 4 of this Statement is hereby incorporated by reference in this Item 3.

 

Item 4.                     Purpose of Transaction

 

The following new subsection is added at the end of Item 4 of the Statement:

 

Second Memorandum of Understanding

 

On July 15, 2014, in light of the Rioforte Investments and the pending Business Combination, Portugal Telecom and Oi entered into the Second MOU.  Pursuant to the Second MOU, Portugal Telecom and Oi agreed to negotiate in good faith the terms of the Definitive Agreements with respect to the matters described below.

 

Pursuant to the Second MOU, the Definitive Agreements must be agreed within 20 days after the date of the Second MOU by Portugal Telecom, Oi, the Oi Subsidiaries and by the other parties to the definitive agreements with respect to the Business Combination signed on February 19, 2014 and described in Amendment No. 2 (the “Business Combination Agreements”).

 

The Second MOU will remain in effect until the earlier of (i) the date of execution of the Definitive Agreements and (ii) September 12, 2014.

 

Exchange of Common and Preferred Shares for the Rioforte Investments

 

Pursuant to the Second MOU, Portugal Telecom expects, subject to conditions, to transfer to the Oi Subsidiaries 474,348,720 Common Shares, representing 17.08% of the issued and outstanding Common Shares, and 948,697,440 Preferred Shares (collectively, the “Exchanged Shares”) in exchange (the “Exchange”) for the Rioforte Investments in the aggregate principal amount of €897 million.

 

The Exchange of the Exchanged Shares for the Rioforte Investments is expected to occur simultaneously, no later than three (3) business days after all the conditions set forth below under “Conditions to the Implementation of the Second MOU” have been satisfied.  The date of the Exchange is referred to herein as the “Exchange Completion Date.”

 

Call Option Granted to Portugal Telecom

 

Pursuant to the Second MOU, Oi and the Oi Subsidiaries are expected to grant to Portugal Telecom a call option (the “Call Option”) to purchase Common Shares and Preferred Shares of the same number and class as the Exchanged Shares (or upon completion of the Merger of Shares, to purchase common shares of CorpCo) (collectively, the “Option Shares”).  The total number of Option Shares is subject to adjustment to reflect any split or reverse split of shares.

 

Portugal Telecom will be entitled to exercise the Call Option at any time, in whole or in part, during a period of 6 years from the Exchange Completion Date; provided that the number of Option Shares that Portugal Telecom may purchase pursuant to the Call Option will be

 

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Schedule 13D

 

transfer thereof in the Oi Capital Increase, other than acts that are necessary to maintain and preserve their legal rights.  In addition, the parties have agreed that the Definitive Agreements will include a provision for the mutual, full and irrevocable release, encompassing the respective current directors and officers and the directors and officers of the parties at the time of the relevant events, as well as a waiver of any claim and any litigation right with respect to the Rioforte Investments and their contribution to Oi.

 

The Second MOU is governed by Brazilian law, and any dispute with respect to the Second MOU is to be resolved through arbitration in Rio de Janeiro, Brazil before an arbitration panel administered by the Brazil-Canada Chamber of Commerce.

 

Item 5.                     Interest in Securities of the Issuer

 

Items 5(a), (b) and (c)

 

The information set forth in Items 5(a), (b) and (c) of the Statement is hereby amended by adding the following paragraphs at the end of the subsection of the Statement entitled “Information as to Common Shares of the Issuer that May Be Deemed to Be Beneficially Owned by the Reporting Persons”:

 

After giving effect to the Oi Capital Increase, as of the date hereof, the Reporting Persons may be deemed to beneficially own, directly and indirectly, 1,372,721,714 Common Shares, or 49.43% of the issued and outstanding Common Shares.

 

Following the execution of the Definitive Agreements and the consummation of the Exchange, the Reporting Persons are expected to beneficially own the following Common Shares:

 

·                                          the Reporting Persons will directly own 607,823,206 Common Shares, or 26.39% of the issued and outstanding Common Shares (giving effect to the exchange of the Exchanged Shares and the holding of those Exchanged Shares in treasury by the Oi Subsidiaries);

 

·                                          pursuant to the Call Option, the Reporting Persons will have the right to acquire an additional 474,348,720 Common Shares, which, if exercised in full, would result in the Reporting Persons again owning directly 38.96% of the Common Shares; and

 

·                                          the Reporting Persons hold a direct and indirect interest in TmarPart (as detailed below), which holds 290,594,788 Common Shares, or 12.62% of the issued and outstanding Common Shares.

 

As of the date of this Statement (as amended), the Reporting Persons hold their direct and indirect interest in TmarPart as follows:

 

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Schedule 13D

 

·                                          the Reporting Persons directly own 383,359,675 common shares of TmarPart, or 5.0% of the total issued common shares of TmarPart (in addition to preferred shares of TmarPart, which are not reported on this Statement);

 

·                                          the Reporting Persons own 57.5% of the share capital, including 49.8% of the voting share capital, of Pasa, the remainder of which is held by Venus, as described below.  Pasa indirectly owns 2,826,846,254 common shares of TmarPart, representing 37.2% of TmarPart’s issued and outstanding share capital;

 

·                                          the Reporting Persons own 57.5% of the share capital, including 49.8% of the voting share capital, of EDSP75, the remainder of which is held by Sayed, as described below.  EDSP75 indirectly owns 2,826,846,254 common shares of TmarPart, representing 37.2% of TmarPart’s issued and outstanding share capital;

 

·                                          PTB2 owns 208,599,126 common shares and 179,482,423 preferred shares of Venus, representing 65.0% of the share capital, including 50.0% of the voting share capital, of Venus, which owns 42.5% of the share capital, including 50.2% of the voting share capital, of Pasa; and

 

·                                          PTB2 owns 410,106,399 common shares and 352,862,887 preferred shares of Sayed, representing 65.0% of the share capital, including 50.0% of the voting share capital, of Sayed, which owns 42.5% of the share capital, including 50.2% of the voting share capital, of EDSP75.

 

The Reporting Persons’ existing beneficial ownership interests in the capital stock of TmarPart and Oi, taking into account (1) the shares acquired by such Reporting Persons in the Oi Capital Increase, (2) the share exchanges described in Item 6 of Amendment No. 2, (3) the subscription and conversion of the debentures referred to in Item 4 of Amendment No. 3, (4) the consummation of the Exchange described in Item 4 of this Amendment and (5) the other steps of the Business Combination, including the Merger of Shares and the Portugal Telecom Merger, are expected to cause Portugal Telecom to beneficially own interests in TmarPart and Oi such that shareholders of Portugal Telecom are expected to hold a minimum stake of 25.6% of TmarPart’s issued and outstanding share capital (assuming no exercise by Portugal Telecom of the Call Option).

 

The information set forth in Item 4 of this Amendment is hereby incorporated by reference in this Item 5.

 

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Schedule 13D

 

Item 6.                     Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

 

The following new subsection is added at the end of Item 6 of the Statement:

 

Second Memorandum of Understanding

 

On July 15, 2014, Portugal Telecom and Oi entered into the Second MOU described in Item 4 of this Amendment, which is incorporated by reference in this Item 6.  The description of the Second MOU is a summary only and is qualified in its entirety by the terms of the Second MOU, which is filed as Exhibit 32 to this Amendment and is incorporated herein by reference.

 

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Schedule 13D

 

Item 7.                     Material to Be Filed as Exhibits

 

Exhibit		Description
1.		Joint Filing Agreement, dated as of July 28, 2014, by and between the Reporting Persons, which supersedes previous Joint Filing Agreement, dated as of October 7, 2013.
2.		Directors and Executive Officers of the Reporting Persons.
3.		Shareholders’ Agreement of Telemar Participações S.A., dated as of April 25, 2008, among AG Telecom Participações S.A., LF Tel S.A., Fundação Atlântico de Seguridade Social, Asseca Participações S.A. and, as intervening parties, Telemar Participações S.A. and Andrade Gutierrez Investimentos em Telecomunicações S.A. (English translation) (incorporated by reference to the Form 6-K of Tele Norte Leste Participações S.A. filed on February 19, 2009 (SEC File No. 001-14487)).
4.		Amendment to the Shareholders Agreement of Telemar Participações S.A., dated as of January 25, 2011, among AG Telecom Participações S.A., Luxemburgo Participações S.A., LF Tel S.A., Fundação Atlântico de Seguridade Social, and, as intervening party, Telemar Participações S.A. (English translation) (incorporated by reference to Exhibit 3.02 of the Form 20-F of Tele Norte Leste Participações S.A. filed on May 4, 2011 (SEC File No. 001-14487)).
5.		Private Shareholders Agreement of Telemar Participações S.A., dated as of April 25, 2008, among AG Telecom Participações S.A., LF Tel S.A., Asseca Participações S.A., BNDES Participações S.A.—BNDESPAR, Fiago Participações S.A., Fundação Atlântico de Seguridade Social and, as intervening parties, Telemar Participações S.A., Caixa de Previdência dos Funcionários do Banco do Brasil—PREVI, Fundação Petrobras de Seguridade Social—PETROS, Fundação dos Economiários Federais—FUNCEF and Andrade Gutierrez Investimentos em Telecomunicações S.A. (English translation) (incorporated by reference to the Form 6-K/A of Tele Norte Leste Participações S.A. filed on November 27, 2009 (SEC File No. 001-14487)).
6.		Amendment to the Shareholders Agreement of Telemar Participações S.A., dated as of January 25, 2011, among AG Telecom Participações S.A., Luxemburgo Participações S.A., BNDES Participações S.A.—BNDESPar, Caixa de Previdência dos Funcionários do Banco do Brasil—PREVI, Fundação Atlântico de Seguridade Social, Fundação dos Economiários Federais—FUNCEF, Fundação Petrobras de Seguridade Social—PETROS, LF Tel S.A., Bratel Brasil S.A. and, as intervening parties, Telemar Participações S.A. and Portugal Telecom, SGPS S.A. (English translation) (incorporated by reference to Exhibit 3.04 of the Form 20-F of Tele Norte Leste Participações S.A. filed on May 4, 2011 (SEC File No. 001-14487)).

 

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