Telefonica Brasil Announces Pricing of Equity Offering

SAO PAULO, April 28, 2015 /PRNewswire/ -- Telefonica Brasil S.A. (NYSE: VIV; BOVESPA: VIVT3.ON and VIVT4.PN) ("Telefonica Brasil") announced today the pricing of the previously announced global offering of 236,803,588 preferred shares, including 29,591,758 preferred shares in the form of American Depositary Shares ("ADSs"), each of which represents one preferred share of Telefonica Brasil.  The preferred shares were offered at a price of R$47.00 per preferred share or US$16.08 per ADS.  Telefonica Brasil has granted the international and Brazilian underwriters the option, exercisable until May 7, 2015, to purchase up to 6,282,660 additional preferred shares at the public offering price.  The global offering is expected to close on or about May 4, 2015, subject to customary closing conditions.

The global offering consisted of an international offering in the United States and other countries outside Brazil and a concurrent offering of common shares and preferred shares in Brazil.  Telefonica Brasil estimates that the net proceeds of the global offering will be approximately R$15.717 billion (or approximately US$5.376 billion, translated at an exchange rate of R$2.9236 to US$1.00), after deducting underwriting discounts and commissions and estimated offering expenses payable by Telefonica Brasil. Telefonica Brasil intends to use the net proceeds from the global offering to (1) fund the cash portion of the GVT acquisition, which is expected to close by mid-2015, (2) repay GVT's loans with a related party, and (3) adjust its capital structure in order to maintain liquidity.

Holders of Telefonica Brasil's preferred shares as of April 1, 2015 were given the opportunity to subscribe for preferred shares and common shares in the Brazilian offering on a priority basis at the public offering prices.  Our controlling shareholder, Telefonica, S.A., and certain of its affiliates (collectively, "Telefonica") fully exercised their respective priority rights in the Brazilian offering and subscribed for an aggregate of 157,124,014 preferred shares and an aggregate of 113,047,534 common shares on a priority basis.  Telefonica also subscribed for an additional 8,568,559 common shares in the global offering.  In the aggregate, Telefonica subscribed for 157,124,014 preferred shares and 121,616,093 common shares, equivalent to approximately R$12.063 billion (or approximately US$4.126 billion, translated at an exchange rate of R$2.9236 to US$1.00).  

Itau BBA, Morgan Stanley, BofA Merrill Lynch and Santander are acting as global coordinators and Bradesco BBI, BTG Pactual, Credit Suisse, Goldman, Sachs & Co., HSBC and J.P. Morgan are acting as joint bookrunners in connection with the international offering.

The international offering has been made pursuant to an effective registration statement (including a base prospectus) on Form F-3 filed with the U.S. Securities and Exchange Commission ("SEC") on March 26, 2015.  A copy of the final prospectus supplement and accompanying base prospectus relating to the international offering may be obtained when available by contacting Itau BBA, 767 Fifth Avenue, 50th Floor, New York, NY 10153, attention: Investment Banking Department – Equity Capital Markets; Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, NY 10014 attention: Prospectus Department; BofA Merrill Lynch, 222 Broadway, New York, NY 10038, attention: Prospectus Department, email: [email protected]; Santander Investment Securities Inc., ECM Department, 45 East 53rd Street, New York, NY 10022, attention: Elias Ehrlich.  Alternatively, you may access these documents for free by visiting the SEC's website at www.sec.gov .

Alberto Manuel Horcajo AguirreInvestor Relations OfficerTelefonica Brasil S.A. – Investor RelationsTel: +55 11 3430-3687Email: [email protected]   Available information: www.telefonica.com.br/ir

Important Information

The international offering in the United States and other countries outside Brazil does not include an offering of common shares.  The common shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act of 1933, as amended.

This press release shall not constitute an offer to sell nor an offer to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.       

TELEFONICA BRASIL S.A.Publicly-held CompanyCNPJ MF 02.558.157/0001-62 - NIRE 35.3.001.5881-4

CONTACT: Telefonica Brasil S.A.Av. Eng. Luis Carlos Berrini, 1376 – 28º andarSao Paulo - 04571-936Telefone: +55 11 7420-1172

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SOURCE Telefonica Brasil S.A.