Shares in Brazil’s Oi have risen sharply following the appointment of Zeinal Bava as the company’s new chief executive on Tuesday.
At the close of business on the same day, Oi’s share price was up by 17% on the Sao Paolo exchange, representing the operator’s biggest increase since October 2008, according to Bloomberg.
Bava replaced José Mauro Mettrau Carneiro da Cunha, the chairman of Oi (Rio de Janeiro, Brazil) who had served as an interim chief executive since 22 January, when former boss Francisco Valim quit the role after the operator had turned in another disappointing set of results.
Bava had previously headed the executive committee at Portugal Telecom (Lisbon, Portugal), one of Oi’s biggest shareholders, and also had a seat on the board of Telemar Participacoes, Oi’s parent company.
A regulatory filing issued by Oi on Tuesday indicated that Bava has resigned from those positions, while da Cunha continues to serve as Oi’s chairman.
Investors appear to have warmed immediately to Bava because of his familiarity with Oi and track record of success.
He comes to the position having gained considerable experience of developing bundled product offerings that combine phone and internet with TV services.
“[He has] contributed significantly toward the ever-integrated and convergent operational management of the Oi and Portugal Telecom Groups, wholly supporting the confidence the strategic shareholders of these two groups placed on him,” said the operator in a statement.
Although Oi had continued to perform poorly throughout 2012, it share price dropped sharply following the departure of Valim, who had impressed investors with his plans for a turnaround.
The boost to the share price following Bava’s appointment suggests that shareholders expect the former Portugal Telecom boss to bring about some rapid improvements.