Machado, Meyer, Sendacz e Opice Advogados has helped Telefónica delist its programme of Brazilian Depository Receipts (BDRs) - a first for the country′s stock market.

The delisting from the BM&FBovespa took place on 23 August.

The Spanish telecoms company took the decision to delist its BDRs due to a lack of liquidity, focusing its attention instead on its Spanish stocks.

The delisting came after meetings with Brazil′s securities regulator CVM, as well as the depositary institution of the BDRs programme, Bradesco, throughout 2009. Telefónica filed the documents with CVM in December of that year, with CVM′s board approving the procedure in October 2010.

Machado Meyer partner Eliana Chimenti says the delisting involved the creation of a sale facility procedure never before implemented in Brazil for the delisting securities. ′There is no precedent,′ she explains. ′It was the first time that a delisting of BDRs was implemented in Brazil and it was also the first time a delisting of securities was made without the launching of a public tender offer.′

She adds that the greatest challenge was to ′conciliate a sale facility procedure with the protection and rights granted to shareholders in an ordinary procedure of tender offer.′

Stockholders now have the option to either sell ordinary stocks related to the BDRs on the Madrid bourse, or remain as Telefónica′s direct shareholders. The total value of Telefónica′s delisting is currently estimated at some 62 million reais (US$38.6 million).

BM&FBovespa has had a rocky time of late, with at least nine companies cancelling IPOs this year and eight pricing them at the bottom of their ranges or below, according to Bloomberg.

Examples include Copersur, which decided to cancel a proposed US$1.7 billion IPO in August due to unfavourable market conditions, and education company Abril Educação, which only raised US$239 million out of an expected US$427 million in July.

Machado Meyer has represented Telefónica since it first entered Brazil in 1996, advising the company on some of its most important deals including the acquisition of Telemig and Amazônia Celular by Telefónica-controlled mobile phone operator Vivo in 2007; and a US$3.7 billion tender offer for Brazilian telecoms company GVT in 2009.

Counsel to Telefónica

Machado, Meyer, Sendacz e Opice Advogados

Partners Eliana Chimenti and Moshe Sendacz, and associates Alessandra de Souza Pinto and Luis Antônio Marimon Netto

(Latin Lawyer 01.09.2011)

(Notícia na Íntegra)