(Telecompaper) Brazilian operator Oi has agreed to enter exclusive talks with L1 Technology on its proposal for a capital injection conditional on agreeing a merger with TIM Brasil. Oi said it made a proposal to L1, a company owned by Russian billionaire Mikhail Fridman, for an exclusivity period of seven months, starting from 23 October. L1 confirmed the talks in a statement, saying discussions were still at a preliminary stage. The two companies will explore proposals "to develop viable structuring and financing options that would enable Oi to participate in any consolidation of the Brazilian telecommunications sector". L1 Technology said it is a long-term investor, and its team has ten years' experience in the telecoms sector in emerging and developed markets. If the transaction is completed, Oi said it expects it will lead to a reduction in leverage and help turn the company into a more robust player, supported by the generation of important synergies and economies of scale. A potential business combination of Oi and TIM would create a more complete and well-positioned telecommunications operator that would be able to compete against global players already operating in Brazil, Oi said.