Brazilian operator Oi has filed a request for judicial reorganization at the Court of the State of Rio de Janeiro, in an attempt to protect its assets from creditors while it renegotiates its debts. Oi started negotiations with creditors last month, but has already faced lawsuits attempting to seize some of its assets in lieu of payment for debt.
Oi said the court filing for judicial protection was "the most appropriate course of action at this time", given the challenges in meeting its debts, threats to assets and "urgent need to adopt measures that protect the Oi companies". As a result it can continue to provide services to customers and protect its image and cash, while continuing with the debt restructuring.
Oi is struggling under around BRL 50 billion in debts and the sharp downturn in the Brazilian economy. Its major shareholders, which include the former Portugal Telecom holding company Pharol, are reportedly resisting the proposed debt-for-equity swap that would give creditors control of the group. Earlier this month the company also lost its CEO.
