Private equity firm Digital Colony bids for Oi's mobile assets: sources

SAO PAULO (Reuters) – Digital Colony, a private equity firm backed by U.S. real estate investor Thomas Barrack and Digital Bridge Holdings, has delivered a bid for the mobile unit of bankrupt Brazilian carrier Oi SA (OIBR4.SA), two sources familiar with the matter said.

Focused on investing in digital infrastructure in Canada, Latin America and Europe, Digital Colony is interested in Oi’s mobile infrastructure assets, not necessarily in providing telecom services directly to consumers, the sources said.

Digital Colony could seek partnerships with other telecoms players to provide them with services using its infrastructure if it proceeds with the deal, which could also involve further asset sales down the road, one of the sources said.

The private equity firm, which has some $20 billion in assets under management, is already talking to one such potential partner, Brazil’s fifth largest carrier Algar Telecom, about a potential deal, they said.

Algar said in a securities filing it is constantly evaluating potential acquisitions and partnerships which may add value to its business.

Digital Colony, which earlier this year was seeking to raise a new multbillion-dollar fund, already owns a Brazilian wireless communications infrastructure provider, named Highline do Brasil.

It is unclear whether Digital Colony delivered a bid for Oi’s mobile assets directly or via its Brazilian subsidiary, which the fund acquired in 2019 from Patria Investimentos.

Highline also delivered a binding proposal to acquire Oi’s cellular tower unit for 1.08 billion reais ($211.61 million) on Friday.

Oi received two binding offers for its mobile assets that same day. Besides Digital Colony, existing operators TIM Participacoes (TIMP3.SA), Telefonica Brasil (VIVT4.SA) and America Movil SAB de CV’s (AMXL.MX) Claro delivered a joint bid.

The Brazilian carrier set a minimum price of 15 billion reais ($2.94 billion) for its mobile assets. The company intends to use the asset sale proceeds to fund its growing broadband fiber unit and pay off debt as part of its effort to emerge from bankruptcy protection.

($1 = 5.1037 reais)

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