By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – One of Brazil’s largest telephone carriers, Oi, filed a bankruptcy recovery request on Monday, June 20th, in Rio de Janeiro after restructuring talks with major shareholders failed. The company is said to register debts totaling R$65.4 billion. The recovery request is said to be the largest in Brazil’s history.
“Considering the challenges arising from the economic and financial situation of Oi companies, in light of the maturity schedule of its financial debts, threats to the company’s cash represented by impending foreclosures or halts in legal proceedings, and in view of the urgency in adopting protective measures for Oi companies, the company considers that the filing of the bankruptcy order is be the most appropriate measure at this time,” said the statement released by the company.
According to company officials the recovery requests seeks to preserve the supply of services to its clients and preserve the value of the company and its subsidiaries for its shareholders. Reuters reported, without a debt restructuring, Oi estimated that almost 92 percent of existing cash would be depleted by year-end.
In addition to Oi’s landline company, the conglomerate also owns Oi Móvel, Telemar Norte Leste, Copart 4 Participações, Copart 5 Participações, Portugal Telecom International Finance BV and Oi Brasil Holdings Coöperatief U.A.
About €230 million euros (US$260 million) in bonds of Portugal Telecom International were set to mature next month, said Reuters. In April of 2014, Brazil’s National Telecommunications Agency (ANATEL) approved a merger between Oi and Portugal Telecom.