Brazil’s Oi files judicial reorganization for R$65.4 billion claims

By Susanna Moon

Chicago, June 21 – Oi SA said it has filed a request for judicial recovery for about R$65.4 billion total claims of persons not controlled by Oi.

The request for judicial reorganization is a move toward restructuring the company’s debt in the face of difficulty reaching other options with its creditors and also “to adequately protect the Oi Companies against creditors while preserving the continuity of the Oi Companies’ operations,” according to an announcement.

Oi said it will maintain operations as usual, continuing all commercial, operating and administrative activities.

The company said on April 25 that it was working with a bondholder adviser to begin the debt restructuring process and that it had entered into a non-disclosure agreement with Moelis & Co., an adviser for a diverse ad hoc group of holders of the bonds issued by Oi and some of its affiliated companies.

“However, considering the challenges of the Oi Companies' economic and financial situation in connection with the maturity schedule of their financial debts, the threats to the assets of the Oi Companies represented by imminent attachments or freezings in judicial lawsuits and the urgent need to adopt measures that protect the Oi Companies, the company decided that filing for judicial reorganization would be the most appropriate course of action,” the release noted.

The request for judicial reorganization will be reviewed at a shareholders meeting.

As previously announced, Oi has hired PJT Partners as financial adviser for evaluating financial and strategic alternatives to optimize its liquidity and debt profile, and it has added Barbosa Mussnich Aragao and White & Case LLP as its legal advisers.

The company said on Sept. 21 that it had hired NM Rothschild & Sons (Brasil) Ltda. to assess the possibility of using proceeds from an asset sale to extend its debt maturities.

Oi is a Rio de Janeiro-based telecommunications service provider.

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