Oi says negotiations with creditors progressing

News General Brazil 2 FEB 2017
Oi says negotiations with creditors progressing
The financial advisor of Brazilian operator Oi, La Place has presented to the Board of Directors of the company scenarios developed based on feedback from the company's creditors. This is expected to allow progress in negotiations on a restructuring plan for Oi, the company announced. The board authorized Oi's Executive Officers Board to continue with the discussions with the creditors, going deeper into some critical items, including, among others, the possibility of converting part of the debt into equity. In the statement, Oi also said that the interactions with creditors are progressing.

According to a separate report from O Globo, the proposal made by Egyptian businessman Naguib Sawiris to invest in Oi did not meet with approval from the board. The paper's sources said the USD 1.25 billion investment for 95 percent of the operator was considered too little. In addition, some shareholders do not want to see their stakes diluted with the entry of a new investor. According to the unnamed sources, the shareholders have agreed that Oi needs to focus on its judicial recovery plan, and not a capital increase via a new investor. 

At the board meeting, a new version of the judicial recovery plan was reportedly presented and discussed, named Project Ocean. Under Oi's new proposal, half of the debt of international creditors (bondholders) would be converted into shares, equal to BRL 5 billion. However, another source pointed out this conversion may not be immediate.

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General

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Oi

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Brazil

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Bankruptcy - Insolvency, Finance, M&A buyouts & divestments

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