Brazil's Oi to file bankruptcy reorganization on Monday: sources

Reuters News
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Posted: Sep 02, 2016 12:40 PM

SAO PAULO (Reuters) - Brazilian telecom provider Oi SA is set to file its bankruptcy reorganization plan with a Rio de Janeiro court on Monday, two sources familiar with the situation told Reuters.

The plan for the debt-laden company would be filed following a board meeting to consider the proposal, also to take place on Monday, two sources said. A third source said the board meeting to consider the reorganization plan could happen as soon as this weekend.

The sources spoke on condition of anonymity because they were not authorized to speak publicly about the matter.

Oi, Brazil's largest fixed-line phone carrier and No. 4 mobile operator, along with six subsidiaries, filed on June 20 for the country's biggest-ever bankruptcy protection, involving 65.4 billion reais ($19.3 billion) of bonds, bank debt and operating liabilities.

The case pits minority shareholders against a controlling group led by Pharol SGPS SA . Some bondholders are courting Brazil's government as an ally to avoid a breakup of the carrier, according to sources involved in the process.

Once the reorganization plan is presented to the court, creditors and the company can negotiate the terms before the judge organizes a creditor vote on the plan.

Oi preferred shares rose 3 percent in afternoon trading on the Sao Paulo stock exchange, to 2.53 reais.

(Reporting by Ana Mano and Guillermo Parra-Bernal; Editing by Richard Chang)