Brazil Anatel:Portugal Telecom Can Take Oi Stake Once Debts Paid

Brazil's telecommunications regulator Friday said it has approved Portugal Telecom SGPS S/A's (PT, PTC.LB) plan to take a stake in Brazil's Tele Norte Leste Participacoes S/A (TNE, TNLP4.BR), or Oi, although it said the Brazilian phone company must first clear its debts with the government.

"There is no concentration (of ownership), nor any impeditive of a competitive nature," said Anatel director Joao Rezende at a press conference.

The company owes the government 74 million Brazilian reals ($44 million) related to the Telecommunications Fiscalization Fund, or Fistel, Anatel said. According to Rezende, "The companies will only be able to implement the operation after paying off the debts."

A spokesman for the Oi shareholders and a spokeswoman for Oi weren't available for comment.

Portugal Telecom is planning to pay up to BRL8.4 billion for a stake in the Oi group, while at the same time Oi is planning a BRL12 billion share issuance to raise fresh capital.

-By Rogerio Jelmayer and Matthew Cowley, Dow Jones Newswires; +55 11 3544 7082; matthew.cowley@dowjones.com

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