June 27, 2016 / 11:20 PM / 2 years ago

UPDATE 1-Aurelius unit seeks bankruptcy of Netherlands-based Oi subsidiary

(Adds comment from Oi filing)

By Ana Mano

SAO PAULO, June 27 (Reuters) - A unit of distressed debt firm Aurelius Capital Management LP asked a Dutch court on Monday to start bankruptcy proceedings against a Netherlands subsidiary of phone company Oi SA, which last week filed Brazil’s largest-ever bankruptcy protection request.

Aurelius unit Syzygy Capital Management Ltd owns bonds sold by Oi Brasil Holdings Coöperatief UA, a Netherlands subsidiary of the Brazilian phone company, Aurelius said in a statement on Monday.

Oi confirmed the “involuntary bankruptcy” filing by Syzygy in the Dutch court in a statement later on Monday. Oi added that Syzygy’s filing relates to $800,000 of Oi Brazil Holdings bonds.

“The aggressive action by a minority owner of the bonds was not unexpected,” Oi said, adding that it is ready to defend itself in the Netherlands from such actions.

“We don’t expect it will have impacts on our bankruptcy protection filing under way in Brazil,” Oi said.

The Syzygy petition was filed in an Amsterdam district court, which is expected to schedule hearings on the process shortly.

Neither Aurelius nor Syzygy gave a timetable for the hearings. Under Dutch law, if the court approves the petition, a bankruptcy trustee will be appointed to defend the interests of creditors in Oi Brasil Holdings.

Apart from participating in the proceedings, the trustee will investigate Oi Brasil Holdings’ prior and current management teams and enforce the company’s claims against parent Oi and other affiliates, the statement said.

Last week, Rio de Janeiro-based Oi, which is Brazil’s fourth-largest fixed-line operator, filed for court protection to restructure 65.4 billion reais ($19.4 billion) in debt. ($1 = 3.3928 reais) (Reporting by Ana Mano; Editing by Lisa Von Ahn and Matthew Lewis)

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