RIO DE JANEIRO -(Dow Jones)- Brazilian mobile telephone company TIM Participacoes SA (TIMP3.BR) plans to sell 190.79 million new ordinary shares on Brazilian and international markets in a sale that could be worth a total of 1.98 billion Brazilian reais ($1.16 billion). The share sale will be registered on Brazil's securities commission CVM Thursday, TIM said in a statement. The number of new shares may be increased if the company proceeds with the sale of a "greenshoe" quota, which would add 15% more shares to those initially offered, the company said. Market estimates of a total income of BRL1.98 billion include the expected sale of the greenshoe allotment, and are based on TIM's closing price on the Bovespa exchange Wednesday of BRL9.04. The new shares will be priced following a bookbuilding period which will end Oct. 4. Shares sold abroad will be sold as American Depositary Receipts, TIM said. Existing TIM shareholders will have priority in the new share sale, in proportion to their current holdings in TIM's total capital, the company said. Italy's largest telecommunications operator Telecom Italia SpA (TI), which is TIM's controlling shareholder, said Thursday it intends to buy shares in the planned capital increase as it doesn't want to dilute its presence in the key Brazilian market. Telecom Italia's sub-holding TIM Brazil will subscribe to a 66.94% stake in the share offering. "The exact amount of the capital increase will be determined after bids have been received and taking into account the greenshoe option for a maximum 15% to be exercised in the eventuality of surplus demand," the Italian company said. The capital increase will help fund the expansion of the Brazilian unit's fixed and mobile network infrastructure, enabling TIM Brazil "to grasp the substantial business opportunities offered by the Brazilian telecommunications market," Telecom Italia said. The Italian operator said its backing to TIM Brazil's capital increase confirms Brazil's strategic role as a core market for the group. TIM rose 1.11% to BRL9.14 in early afternoon trading on the Bovespa exchange, after jumping 5% at the start of trading on news of the share sale. -By Diana Kinch and Giada Zampano, Dow Jones Newswires; + 55 21 2586 6086, diana.kinch@dowjones.com, +39 06 69766920; giada.zampano@dowjones.com
