The new shareholder agreement being negotiated as part of the capitalization of Globo Cabo entails sufficient corporate governance improvements to enable the company to qualify for Level 1 of the São Paulo Stock Exchange?s New Market.
That won?t happen, however, says Eduardo Bunker Gentil, BNDES director of capital markets and new products. To qualify for Level 1, Globo Cabo would also have to give voting rights to all its stock (including preferred shares); ADRs currently account for roughly 30% of the company?s equity; ADRs are traded in the U.S. and the Cable Act requires that Brazilians own at least 51% of voting stock. Globo Cabo has therefore decided to file for Corporate Governance Level 2, which at least includes 100% tag-along.
The new shareholder agreement will be ready in 30 days? time. A few details on the role of each major shareholder still need to be sorted out. In addition, Anatel has to audit Telemar?s claim to have completed its regulatory targets as a fixed-line telephone incumbent, so that BNDES, which holds a significant stake in Telemar, can legally sit on the board of Globo Cabo.