In new court-supervised reorganization plan, Oi foresees BRL 4 billion loan and property sale – 05/20/2023 – Market

Oi’s Board of Directors approved on Friday (19) the terms and conditions of the company’s new judicial reorganization plan (RJ) and also its presentation, on the same day, in the action that runs at the 7th Business Court of Rio de Janeiro January.

The new plan has 233 pages and, according to the company stated in a material fact, “reflects the negotiations held with its main creditors and other stakeholders”.

The statement with the board of directors’ decision was sent to CVM (Securities and Exchange Commission) this Saturday (20) and is signed by Oi’s director of finance and investor relations, Cristiane Barreto Sales.

The company hopes, with the new plan, to overcome the current economic and financial situation based on four axes, which are: credit restructuring with or without guarantees; raising an extra-bankruptcy loan of at least R$ 4 billion; capital increase and new lines of credit; and potential disposal of assets.

Among the assets subject to disposal, the company included credits from the distribution of surplus plans in its pension fund, the satellite TV subscriber base and equipment associated with this operation, telecommunication towers and equity interests in companies.

The ratio does not indicate how much the company plans to achieve with each operation.

The new plan provides for the creation of a UPI (acronym for isolated production unit, a mechanism used in RJs to separate parts of the business being restructured) including the operation of broadband services via fiber optics. According to the document, in December 2022, the company counted 3.8 million accesses throughout Brazil with the provision of broadband.

In the list of shareholdings that may be traded, Oi included the payment service Paggo, of which it owns 50%, Rio Alto Investimentos e Participações, which it controls 100%, V.Tal (which the company has been trying to sell since 2022), with 34.12%, and several companies outside Brazil, such as Timor Telecom (Timor-Leste), Africatel (Germany), Oi Investimentos Internacionales (Portugal), Vex Ukraine (Ukraine) and Portugal Telecom (Holland).

The company also included a list of more than 100 pages with properties that could be sold or transferred.

When it sent its new request to the Court, Oi declared that it had BRL 43.7 billion in debt, of which BRL 1 in class 1, as labor debts are called. The early March request was made less than three months after the announcement of the end of the company’s first judicial recovery.

In the plan presented on Friday, Oi says that it continues to play “an important role in the Brazilian telecommunications market and in the national economic scenario” and that it currently has 5,000 direct employees and another 20,000 indirect ones.

According to the company, in just over 3,000 municipalities, it is the only provider of telecommunications services.

Oi filed the first request for judicial recovery in June 2016, at the Court of Justice of Rio de Janeiro, after accumulating a gross debt of approximately R$ 65 billion, with more than 55 thousand creditors.