SÃO PAULO–Oi is going to restructure its debt and move on, said CEO Marco Schroeder during his speech at Futurecom 2017. However, he highlighted to the members of the press, that to reach an agreement between shareholders and creditors is crucial for the survival of the company.
The Brazilian mobile carrier filed an application for judicial reorganization on June 20, 2016, which was subsequently processed and granted on June 29 2016, by the 7th Corporate Court of the State of Rio de Janeiro.
Oi is Brazil’s largest bankruptcy protection request. The total claims of persons not controlled by Oi listed in documents filed with the request for judicial reorganization totaled, by that date, approximately BRL 65.4 billion.
Since then, Oi has struggled to reach a deal with various creditors. On Monday, Oi’s CFO resigned and it raised rumors of a state intervention, said Reuters citing the head of telecommunications regulator Anatel Juarez Quadros.
Early this week, two major creditor groups–International Bondholder Committee and Ad Hoc Group of Oi Bondholders–announced an alternative plan to restructure the wireless carrier’s debt. In a statement, they said they would agree to swap BRL 26.1 billion worth of their Oi bond holdings into the equivalent of 88% of the company’s equity. They would also endorse injecting BRL 3 billion of capital into Oi.
Schroeder noted that if the shareholders and creditors don’t reach an agreement telecom agency Anatel should interfere in order to keep the service provision for customers. Oi has until next week to present another version of its recovery plan.
Changing telecom act
During Futurecom, Schroeder also described the approval of the bill of law PLC 79/2016 aimed at redesigning the Telecommunications Act as an effort to deregulate the sector. Among other points, the PLC 79/2016 allows the conversion of concessions into authorization (private regime). According to him, it’s mandatory to the government passes the draft bill in order to encourage the sector to keep its investments up.
“Brazil needs to evolve its telecommunications bill and secure the money from the funds that are collected with the goal to improve telecommunications sector are really used to what it has been designated for,” he noted, adding the funds should be used to boos broadband coverage.
The post Oi CEO says bankruptcy deal crucial to carrier’s survival appeared first on RCR Wireless News.