Oi: China Development Bank challenges company protection – 02/23/2023 – Market

The China Development Bank filed a lawsuit in Rio de Janeiro to contest the precautionary measure that protected the operator Oi against creditors. The Chinese institution joins Brazilian banks that have already filed similar claims against the company.

Earlier this month, Judge Fernando Cesar Ferreira Viana, from the 7th Business Court of the TJ-RJ (Court of Justice of the State of Rio de Janeiro), granted protection against the freezing of assets by Oi’s creditors.

There is an expectation that this process will result in the company’s second request for judicial recovery. The end of the first process was announced in December 2022.

In its petition, the China Development Bank understands that the first court-supervised reorganization has not yet been formally completed, as the closing sentence has not yet become final (final stage of the judgment). In the view of the bank’s lawyers, the request for protection is “illegal”.

For the institution, there are “strong indications” that the company “has not fulfilled and will continue not to comply” with the obligations assumed in the original recovery plan and in its respective amendment.

“[…] it is completely absurd to allow the Oi Group, after just over two years after the presentation of practically a new PRJ, to be able, for the third time in a row, to carry out a new round of restructuring its debts, in clear damage to its creditors”, says the bank.

The operator has a list of 14 creditors with which the debt reaches BRL 29.75 billion, according to values ​​updated until December 31, 2022. Of the total amount, BRL 3.8 billion are associated with the China Development Bank.

Institutions such as Banco do Brasil, Caixa Econômica Federal and Bradesco have also challenged in court the precautionary measure favorable to the operator.

For Caixa and Banco do Brasil, a new court-supervised reorganization would allow the company to “continue imposing on its creditors loss after loss, default after default, even forcing its perpetuation in the market in an unnatural way”.

Last week, Oi came out in defense of its restructuring process. In a note, the company pointed out that the anticipated protection was legitimate. He also said that he fulfilled all the obligations of the first judicial recovery.

“The request for early relief to the Justice, made at the end of January, is part of Oi’s legitimate actions in search of long-term sustainability, after fulfilling all obligations so far arising from the Judicial Recovery Plan – approved in 2018 and closed at end of 2022,” he said at the time.

The operator said that “immense transformations”, still ongoing, have accompanied the company since the first judicial recovery. In this sense, he mentioned a “complete change in its governance”. Oi also obtained protection against collections from creditors in the New York court.