Oi says protection against creditors is legitimate – 02/16/2023 – Market

The operator Oi came out in defense this Wednesday (15) of its restructuring process, after banks challenged in court the precautionary measure that protected the company against early redemptions of its debt.

Judge Fernando Cesar Ferreira Viana, from the 7th Business Court of the TJRJ (Court of Justice of the State of Rio de Janeiro), this month granted protection against the freezing of assets by the company’s creditors. It is expected that the process will result in Oi’s second request for judicial recovery.

In a note, the operator claims that the anticipated relief was legitimate. It also says that it fulfilled all the obligations of the first judicial recovery, completed in December 2022.

“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,” the company said.

“This process has been carried out entirely privately and the company’s initial debt, which in updated values ​​would be around R$ 90 billion, was reduced today to approximately R$ 33 billion – including the discharge of 100% of liabilities with the BNDES, of almost BRL 5 billion”, he added.

Banco do Brasil, Caixa Econômica Federal and Bradesco challenged in court the precautionary measure that protected Oi this month. They allege that the company’s first court-supervised reorganization was not formally concluded, as the closing sentence has not yet become final (final stage of the judgment).

For this reason, they say, Oi would not be entitled to ask for a new court bailout. For Caixa and Banco do Brasil, a new recovery 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”.

In recent days, Oi also obtained protection against collections from creditors in the New York court. The company claims that “immense transformations”, still in progress, have accompanied the company since the first judicial reorganization. In this sense, he cites a “complete change in its governance”.

“Oi’s recovery process, however, although strictly adhered to so far, is not complete and needs additional actions, mainly due to exogenous and uncontrollable conditions inherent to any long-term plan, such as the deterioration of the environment macroeconomic impact, an even faster decline in fixed-line revenues and impacts from past obligations,” he added.