Oi's bondholders have come out against the reorganization plan filed in court by the company. The steering committee of bondholders said in a statement that the plan "will not achieve the support of its various creditors and reflects a failure to understand the severity of Oi’s current situation". They accused Oi of designing a plan based on the interests of its "most junior stakeholders", who are not even entitled to vote on the plan, and to protect the company and its management from lawsuits over fiduciary responsibilities, fraud and other claims.
In particular the controlling shareholders and new investors in Oi are shielded, retaining their equity stakes, while creditors are asked to forgive BRL 22 billion in debt. The committee said it was not opposed to swapping debt for equity, but could not agree to the terms proposed by Oi. It claims it was not consulted prior to the filing of the plan, nor were many of the large creditors, despite their willingness to negotiate.
The bondholder committee has started talks with other major creditors of Oi in order to develop their own proposal for reorganising the company and its debts. The plan would see significant deleveraging of the company through a substantial debt-to-equity conversion and the potential for new funding backstopped by existing creditors. Combined, the Bondholder Committee and these other major creditors, hold more than 60 percent of the company’s overall financial liabilities.
