Brazil’s Oi closes judicial reorganization after more than six years

By Sarah Lizee

Olympia, Wash., Dec. 15 – Oi SA announced that it has exited bankruptcy protection after a Rio de Janeiro court decreed the end of the judicial reorganization of the company and subsidiaries Oi Movel SA, Telemar Norte Leste SA, Copart 4 Participacoes SA, Copart 5 Participacoes SA, Portugal Telecom International Finance BV and Oi Brasil Holdings Cooperatief UA.

The company has paid its R$4.6 billion of debt to the National Economic and Social Development Bank, its largest individual creditor.

The company said it also settled Mobile’s R$2.4 billion bridge loan.

The process also included the acquisition, via public offering, of 98.71% of its notes due in 2026, in the amount of R$4.4 billion.

InfraCo’s convertible debentures were also paid in the amount of R$3.5 billion.

Oi noted that the bankruptcy credits not yet paid off, as well as illiquid credits whose triggering event was prior to the request for judicial reorganization, remain subject to the effects of the judicial reorganization plan and will be paid in line with the deadlines, terms and conditions established in those instruments.

As such, the court’s decree closing the judicial reorganization established a specific system for handling the processes of contestation and qualification of credits in the judicial reorganization of Oi, in order to guarantee equal treatment among the creditors subject to the plan.

In October, Oi started negotiations with its creditors, with the assistance of Moelis & Co., aiming to improve its debt profile so it can restore its long-term viability.

Oi is a Rio de Janeiro-based telecommunications service provider. It filed for Chapter 15 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on June 21, 2016 under case number 16-11791.

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