Cabo Verde and Brazilian group Oi clarify situation of Cabo Verde Telecom

19 October 2015

The government of Cabo Verde (Cape Verde) and Brazilian telecommunications group Oi are making contacts to clarify the rights of Oi to Cabo Verde Telecom (CVT), reported Cape Verdean weekly newspaper A Semana.

The government, through a committee set up by the Ministry of Infrastructure and the Maritime Economy and the Oi group, are negotiating to reach an out of court agreement on the strategic partnership between the State of Cabo Verde and PT SGPS, which has since gone into the hands of Oi.

If the two side reach agreement, the Brazilian company will suspend its complaints about rights to Cabo Verde Telecom presented to the International Centre for Settlement of Investment Disputes (ICSID), a World Bank agency and the International Chamber of Commerce in Paris.

The Brazilian group, which initially wanted the matter to be resolved by the courts, has begun a negotiating process due to the transformation in June of PT SGPS (with which the State of Cabo Verde signed a shareholders agreement on Cabo Verde Telecom) in Pharol.

At the end of December 2014, the Cape Verdean government unilaterally broke off the strategic partnership agreement with Portugal Telecom (PT), in place since the privatisation of Cabo Verde’s telecom operator, CV Telecom in 1996.

The government justified its termination of the contract saying that the Portuguese company violated the agreements and strategic shareholders by selling, without the prior permission of the Cape Verdean authorities, part of the shares it held in CV Telecom.

“The Cape Verdean state and CVT were not taken into consideration with regard to the merger between PT and HO, nor had any information about the fact that the shares that PT had in CVT had passed on to Oi. There was a violation of the shareholder agreement, since the shares of CVT had been sold as an indivisible and inalienable block, which is t say, could not be sold without the permission of the Cape Verdean state,” according to the arguments given at the time.

With 440,000 customers in mobile telephony and 64,000 fixed-line customers, CV Telecom currently has the following shareholder structure – the Oi group holds a 40 percent stake, the National Institute of Social Security (INPS) of Cabo Verde 37.9 percent, Cape Verdean private companies 8.7 percent, Angolan oil company Sonangol 5 percent and the State of Cabo Verde 3.4 percent, and the remaining 5 percent in the hands of the Association of Small Minority Shareholders. (macauhub/CN/CV/PT)