Oi’s debts reach BRL 33 billion and may begin to be foreclosed if the company fails to reach an agreement with creditors.| Photo: Daniel Castellano/archive/Gazeta do Povo

The telecommunications company Oi confirmed, after the closing of the market this Wednesday (1st), the new request for judicial recovery filed with the 7th Corporate Court of the Judicial District of Rio de Janeiro on an urgent basis (see in full).

According to the company, the process will not interrupt the services provided to customers nor the planned investments in projects that it has already been developing.

In early February, Oi obtained temporary protection of assets in court to stop paying debts and avoid foreclosures for a period of 30 days. The grace period, however, expires this Friday (3) and the company is trying to reach an agreement with creditors to extend the date.

“Although the Company continues to make progress in this regard, due to several factors, including (a) the approaching date of the end of the effects of the urgent injunction pending in the judgment of the 7th Corporate Court of the Judicial District of the Capital of the State of Rio de Janeiro ; (b) negotiations still in progress with the aforementioned financial creditors of the Company and its advisors, with the existence of negotiating points still subject to agreement between the parties that make it impossible for the Company to conclude, up to the present moment, the negotiations and objectives mentioned above ; (c) the economic-financial scenario in which the Company and its Subsidiaries find themselves, with overdue debts and the potential early and cross maturity of financial contracts entered into; and (d) the need to maintain legal protection against potential foreclosures by creditors and other measures against the Company and its Subsidiaries, the request for Judicial Recovery proved to be the most appropriate measure for the Company and its Subsidiaries at this time”, says the fact relevant filed with the CVM.

Oi also says that the request for judicial recovery will be submitted “to the ratification of the shareholders at a general meeting”, and reaffirms that “it has in its operational and commercial capacity to be successful in proposing and approving a recovery plan judicial process that allows a gain in value for the Company and its Subsidiaries and in maintaining the high level of service provision to its customers”.

This is Oi’s second request for judicial recovery. In the first, in 2016, the company accumulated a debt of BRL 65.38 billion. The company still has a debt of BRL 33 billion, according to a recent statement (see full text).