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UPDATE 3-Oi creditors offer more capital for restructuring -sources
October 27, 2017 / 12:48 PM / 21 days ago

UPDATE 3-Oi creditors offer more capital for restructuring -sources

(Adds company response, Oi no comment)

By Tatiana Bautzer and Gram Slattery

SAO PAULO, Oct 27 (Reuters) - The two largest groups of Oi SA bondholders have agreed to inject more cash into a proposed restructuring of the Brazilian telecom’s debt, two people familiar with the matter said on Friday, in the latest twist in Latin America’s biggest-ever bankruptcy.

The International Bondholders Committee and the Ad Hoc Group of Oi Bondholders said in a Friday statement that proposed changes, which it did not specify, could draw support from other creditors and provide enough new capital to make the restructuring plan “viable.”

A third source with knowledge of the situation said Oi was analyzing the proposal.

The sources requested anonymity because they are not authorized to speak publicly on the matter. Oi declined to comment.

The additional funding could help the groups fend off a rival restructuring plan by influential shareholder Nelson Tanuré and a smaller group of bondholders known as the G6.

The two main credit groups had previously committed to injecting 3 billion reais ($920 million) the restructuring in court of Oi’s 65 billion reais of debt. Both groups and export credit agencies are owed a combined 22.6 billion reais by Oi.

The bankruptcy’s resolution has been stalled by growing tensions between the board, management, shareholders, bondholders and the government.

Brazilian telecom watchdog Anatel on Thursday urged Oi shareholders and board members to keep Chief Executive Marco Schroeder at the helm of the carrier. The regulator had threatened to intervene in the company, after news reports said management was being threatened with dismissal from investors linked to Tanuré, sources told Reuters.

A working group in Brazil’s government has been preparing suggestions for the restructuring of the carrier, which filed for bankruptcy protection in June 2016.

Creditors are scheduled to vote on the revised restructuring proposal at a Nov. 10 meeting. If they cannot reach a consensus, the company would be liquidated, wiping out much of their investments.

One source said private equity fund TPG Capital Management LP and China Telecom Corp Ltd were looking at Oi’s business for a possible takeover bid but have not drafted any concrete proposal.

TPG declined to comment.

$1 = 3.26 reais Reporting by Tatiana Bautzer and Gram Slattery in Sao Paulo; Editing by Lisa Von Ahn; Additional reporting by Leonardo Goy and Silvio Cascione in Brasilia; editing by Lisa Von Ahn and Richard Chang

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