Stricken Brazilian telecoms giant Oi has announced that it has completed its planned capital increase, in accordance with the company’s long-running Judicial Reorganisation Plan, and as approved by the board of directors in October 2018. As such, on 25 January 2019 a total of 1,604,268,162 new common shares were subscribed and paid for – representing the balance of new common shares not acquired by shareholders during the exercise period of pre-emptive rights. In total, 3,225,806,451 new common shares have been issued during the capital increase process, generating around BRL4 billion (USD1.1 billion) for the cash-strapped telco.
Running in parallel, on 25 January Oi issued 272,148,705 additional common shares ‘nominative and with no par value’, at a price of BRL1.24 per share to certain investors and investment fund managers (termed ‘Backstop Investors’), as agreed in December 2017 – equivalent to a further capital increase of BRL337.5 million.
According to TeleGeography’s GlobalComms Database, Oi filed the largest bankruptcy request in Brazil’s history in June 2016, effectively leaving it at the mercy of its creditors. The filing, which covered Oi and six subsidiaries, listed BRL65.4 billion of debt, and the company said that it chose judicial reorganisation to preserve the value of its holdings and to continue providing services to its customers.