Pharol rejects alternative restructuring plans for Oi, including EMC proposal

30 Jan 2017

Pharol SGPS, the largest shareholder of Brazilian telecoms group Oi – which is undergoing judicial reorganisation – has given a statement to Reuters confirming that it will not support any alternative restructuring plans for Oi, including the proposal made earlier this month by Elliott Management Corporation (EMC, the hedge fund controlled by US billionaire Paul Singer). Pharol stated that it will only support Oi’s proposed reorganisation as approved by the operator’s board.

As reported by CommsUpdate earlier this month, EMC was reportedly eyeing a BRL9.2 billion (USD2.8 billion) move for a 60% stake in Oi. In December Egyptian tycoon Naguib Sawiris alongside creditors Moelis and FTI Consulting presented Oi with an alternative debt restructuring plan, which would see Sawiris invest USD250 million in Oi, while a further USD1 billion would be raised by a public share sale. Oi filed the largest bankruptcy request in Brazil’s history in June 2016, after failing to reach an agreement with creditors. The filing, which covered Oi and six subsidiaries, listed BRL65.4 billion of debt and the company chose judicial reorganisation to preserve the value of its holdings and to continue providing service to its customers.

Meanwhile, Oi has confirmed on its Investor Relations site that the District Court of Amsterdam has postponed its hearing and decision on applications for conversion of the suspension of payments proceedings for Oi’s financial vehicles in the Netherlands – Oi Brasil Holdings Cooperatief and Portugal Telecom International Finance. The court now expects to render its decision on both companies on 2 February.

Brazil, Oi, Pharol (formerly Portugal Telecom SGPS [PT SGPS])