November 29, 2016 / 10:56 AM / a year ago

Top shareholder in Brazil's Oi does not oppose equity dilution

SAO PAULO (Reuters) - The biggest shareholder in Oi SA, the Brazilian telephone carrier operating under bankruptcy court protection, is not opposed in principle to a share dilution, newspaper Valor Econômico cited an executive at the shareholder as saying.

Luís Palha da Silva, chairman of Pharol SGPS SA, told the newspaper a dilution was acceptable provided “it takes into consideration the interests of all of the parties involved.”

Pharol owns 27.5 percent of Oi’s voting stock through Bratel BV, a wholly-owned subsidiary.

Oi filed for bankruptcy protection in June to restructure about 65.4 billion reais ($19.2 billion) in bond, bank loans and regulatory liabilities. On Sept. 5, it presented a reorganization plan which was rejected by certain of the creditors, who considered it unfair.

On Nov. 21, Rio de Janeiro-based Oi formally announced the election of financial adviser LaPlace Finanças to help the company shape a new debt restructuring offer that will be presented to the creditors.

Despite considering a potential share dilution, Silva told Valor that Pharol had a long-term interest in Oi, adding it was “highly unlikely” Pharol would relinquish its equity stake during Oi’s court-supervised reorganization.

Reporting by Ana Mano; Editing by Mark Potter

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