(MENAFN) Portugal Telecom has been forced to take a cut in its share of the merger with Brazil's Grupo Oi, Gulf Daily News reported.
The decision comes after a holding company of the Espirito Santo family failed to repay more than USD1 billion it owed to the telecom company.
Portugal's largest telecoms provider said it would take legal action to try and recover the debt from the family company, Rioforte, which fell due on Tuesday.
"This is bad for Portugal's image as a whole, which was just beginning to improve as the country exited the (EU/IMF) bailout," said head of Informacao de Mercados Financeiros consultants.
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