Brazil Oi's creditors reaffirm commitment to alternative plan
SAO PAULO (Reuters) – Brazilian wireless carrier Oi SA’s (OIBR3.SA) two biggest creditor groups on Monday reaffirmed their commitment to an alternative debt-restructuring plan, about a month after pushing back against a proposal from the company’s management.
In a statement, the International Bondholder Committee and the Ad-Hoc Group of Oi bondholders, along with a group of export credit agencies (ECAs), said their plan would have the company invest 6.5 billion reais (1.55 billion pounds) per year, a 30 percent increase from current levels.
Both groups and the ECAs are owed a combined 22.6 billion reais, or more than one-third of Oi’s 65 billion reais in debt being restructured in court as part of Brazil’s biggest bankruptcy protection case ever.
Their insistence on an alternative to Oi’s proposal highlights the conflict between Oi management, shareholders and creditors at Brazil’s No. 4 wireless carrier.
Oi’s Chief Financial Officer Ricardo Malavazi Martins resigned on Monday, the company said in a securities filing, without specifying a reason. Current head of investor relations Carlos Brandão will take on his duties on an interim basis.
The creditor groups had said in August they would agree to swap 26.1 billion reais worth of their Oi bond holdings for 88 percent of the company’s equity.
They also endorsed injecting 3 billion reais of fresh capital into Oi, revamping governance practices, repaying regulatory debts and equal treatment for Oi’s unsecured creditors.
Their proposal contrasts with the management plan to inject 8 billion reais worth of capital into Oi through a sale of new stock and a debt-for-equity swap. Oi executives suggested last week they could increase the size of the capital hike to 9 billion reais, but creditors did not vote on the change.
Reporting by Bruno Federowski; Editing by Tom Brown