Brazil's largest fixed-line telephone operator Telemar Group failed in its final attempt to restructure its shareholdings when 36.94 percent of the company's shareholders rejected the proposal, local media said on Friday.

Only 29 percent of the shareholders who attended the assembly voted for the restructuring plan.

The result frustrated to analysts, who thought the project was certain to be approved.

Telemar's shares have dropped 22 percent at Sao Paulo Stock Exchange (Bovespa).

The restructuring would have been the biggest ever carried out by a Brazilian company. The Telemar Group, comprised of Telemar, Tele Norte Leste and Telemar Norte Leste, planned to remove its shares from the market and return to the shareholders a brand-new company called Oi.

Although some shareholders favored the plan, they did not approve of returning ordinary shareholders 2.6 times more shares than preferential holders, as proposed by the restructuring plan.

Telemar CEO Luis Eduardo Falco said there was no possibility of reformulating the proposal, which he admitted was aimed at weakening the participation of preferential shareholders.

But he stressed the restructuring would increase the company's market value and offset recent losses.

Source: Xinhua