The tie-up between Oi S.A. (BOVESPA:OIBR4) and Telecom Italia S.p.A. (BIT:TIT is expected to close by May 2016, Oi's biggest shareholder told Brazil's daily Folha de Sao Paulo on January 5, 2016. Pharol SGPS, which owns roughly 15.5% of Oi, told the newspaper that a potential tie-up with Tim would significantly resolve Oi's debt struggles. Oi decided to hire in the next few weeks two more banks to advise it on possible merger with TIM.

A source said that Oi's adviser on the process, Grupo BTG Pactual SA, could present a merger proposal for both companies before the end of January 2016. The plan would entail the participation of LetterOne Holdings S.A., through a $4 billion cash injection into Oi, the same sources said. LetterOne has a seven-month exclusivity period for the Oi-TIM deal that expires in May 2016.

In addition to BTG Pactual, which will continue as leader of the process, four other firms have offered their services: Morgan Stanley, UBS, HSBC/Santander and Barclays. BTG Pactual did not comment on this report.