July 1, 2002
Globocabo, Brazil's leading cable company, is facing a stark choice. It can either restructure its debt or sell out to a competitor. Its parent company, Organizações Globo, the overleveraged media group, is also in trouble as the cost of servicing its dollar-denominated debts rises with the decline in value of the real. Globo is mulling a R$1 billion ($378 million) public equity offering on the São Paulo Stock Exchange. Telesp Celular Participações, the Portuguese-owned cellphone operator, is also overextended and it too is considering a plan to rebalance its capital structure through a local equity offering.
Latin American companies that raised dollar financin
Even if it hurts, Latin American companies recognize the need to look to the equity markets as a way to rebalance capital structures weighed dwon by debt and Brazil is leading the way. The challenge is to drum up investor interest.