SAO PAULO, Jan 22 (Reuters) - Grupo Oi SA, Brazil’s biggest fixed-line telephone company, ousted Chief Executive Francisco Valim on Tuesday in the midst of a turnaround plan for its mobile phone unit, sending shares down more than 7 percent.
Valim, who became CEO in August 2011, will be replaced by Chairman Jose Mauro Carneiro da Cunha, Oi said in a securities filing. Jose Augusto da Gama Figueira will substitute for Cunha on the board.
Last year Valim announced that Oi would ramp up investments in a bid to retain clients and catch up with competitors in Brazil’s hotly contested wireless market. But he warned in November that the company’s 2012 revenue target was “on watch” due to disappointing handset revenue.
The Valor Econômico newspaper reported on Tuesday that Valim, who has experience turning around struggling companies, faced resistance from major shareholders due to his “assertive” style and ambitious business plan. Oi declined to comment on the Valor report.
Preferred shares of Oi fell more than 7 percent in early trading, the biggest decline since Aug. 1, 2012.
In the third quarter, Oi managed to increase revenue from a year earlier for the first time in two years. But its mobile market share continued to lag Telefonica Brasil, an arm of Spain’s Telefonica, TIM Participacoes , the local unit of Telecom Italia, and Claro, owned by Mexico’s América Móvil.
The company is scheduled to report fourth-quarter results on Feb. 7.