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UPDATE 1-NII Holdings confirms in talks about Nextel Brazil unit

Tue 7th August, 2018 4:04pm
(Adds details on sale process, possible regulatory issues,
context, share price)
    By Gram Slattery
    SAO PAULO, Aug 7 (Reuters) - Mobile carrier NII Holdings Inc
 NIHD.O  has begun "strategic discussions" about the future of
its Nextel unit in Brazil, an executive said on Tuesday,
confirming a Reuters report that raised the prospect of
consolidation in Brazil's telecom sector.
    On a conference call with analysts to discuss second-quarter
results, Chief Financial Officer Daniel Freiman said Rothschild
& Co  ROTH.PA  was advising on the process.
    Roberto Rittes, head of Nextel Brazil, said industry
regulator Anatel was likely to raise spectrum cap limits in the
fourth quarter, which would speed up a potential sale, adding
that he saw no serious opposition to the process. 
    NII shares soared as much as 31 percent on June 28 after
Reuters reported that NII had hired Rothschild to explore a sale
of Nextel Brazil. The stock has risen some 1,400 percent
year-to-date gain amid bets of a takeover.*:nL1N1TU1K0
    Among the interested parties, Reuters reported, were
Telefonica Brasil SA  VIVT4.SA  and Access Industries, which has
a minority stake in Nextel. Analysts have also flagged AT&T Inc
 T.N , America Movil SAB de CV's Claro  AMXL.MX , and TIM
Participacoes SA  TIMP3.SA , the local unit of Telecom Italia
SpA  TLIT.MI , as potential buyers. None of the companies have
confirmed their interest.
    Freiman declined to comment on potential bidders, saying
only that "strategic discussions" were ongoing.
    A sale to local rivals will depend on Anatel increasing
spectrum caps. Much of Nextel's value comes from its spectrum
rights in the wealthier states of Sao Paulo and Rio de Janeiro,
but companies like TIM and Telefonica Brasil are already running
up against current limits in those states.
    Nextel Brazil has about 3 million customers, but its
earnings before interest, taxes, depreciation, and amortization
(EBITDA) are close to zero. 
    NII reported a net loss $71 million on Tuesday, sending
shares 5 percent lower.    
    Nextel Brazil is NII's division operating in Latin America
after it exited operations in Peru, Chile and Mexico, where its
unit fetched $1.9 billion from AT&T Inc  T.N  three years ago.

 (Reporting by Gram Slattery
Editing by Susan Thomas and Paul Simao)
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