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Portugal Telecom Stock Still Plummeting

Portugal Telecom, SGPS (ADR) (PT) stock fell 10.34% to close at $1.3 yesterday. The steep decline seems to be the impact of its failure to achieve credit protection for its subsidiary Rioforte, which has defaulted on a debt of $1.15 billion.

Portugal Telecom stock reached a record low when the court rejected requests for credit protection on October 17. Moreover, Brazilian Communications Minister Paul Bernardo was critical of the company’s €897 million ($1.14 billion) investment in Espirito Santo International SA, and expressed concerns about an illegal transfer of money. Espirito filed for bankruptcy last week after an earlier request for credit protection was denied by the court.

Oi, the largest telecommunication company in Brazil and South America, is currently considering selling the assets it holds in Portugal Telecom to Altice SA (ATC). Bloomberg estimates that 3,000 Portugal Telecom towers, worth $384 million, might be divested by the Brazilian company.

According to other news, Comissão do Mercado de Valores Mobiliários (CMVM) has temporarily banned naked short selling for Portugal Telecom. Moreover, UK has also prohibited the short-selling of the company’s shares, which are at their lowest since the 1995 Initial Public Offering (IPO). The company already faces a negative five-year growth rate of 14.7%.

The chances for revival remain dim. Pedro Oliviera, a trader in Lisbon, said: “The fact that the court rejected creditor protection to Rioforte is a sign that Portugal Telecom may not recover much of the debt.”

Portugal Telecom stock is down 60% this year, with not much chance for improvement in the near future.

http://www.bidnessetc.com/27716-portugal-telecom-stock-still-plummeting/



Source: http://www.bidnessetc.com/27716-portugal-telecom-stock-still-plummeting/

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