Brazil's Oi, Portugal Telecom Extend Deadline For Deal To Jan 31

Brazilian telecommunications group Tele Norte Leste Participacoes S/A (TNE, TNLP4.BR), or Oi, and Portugal Telecom SGPS S/A (PT, PTC.LB) on Friday said they've extended the deadline for negotiations over their future partnership until Jan. 31, 2011, from Oct. 31.

Negotiations over the documents "that will define the terms and conditions of the industrial alliance are being finalized," the companies in the Oi group said in a joint statement, explaining the delay.

The term sheet was signed July 28, and envisages Portugal Telecom taking a significant stake in the Oi group.

Earlier in the day, Brazil's telecommunications regulator, Anatel, said it has approved Portugal Telecom's plan to take a stake in 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 Matthew Cowley, Dow Jones Newswires; 55-11-3544-7082; matthew.cowley@dowjones.com