By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – Pharol SGPS, former Portugal Telecom and largest shareholder of Brazilian telecommunications operator Oi, said on Friday (January 27th) that it would only support an alternative reorganization plan if backed by Oi’s Board. Oi filed for bankruptcy recovery in June of 2016, with debts totaling over R$65 billion.
The Pharol SGPS statement specifically referred to a proposal made by billionaire Paul Singer’s Elliott Management Corp this week, according to Reuters. According to the news agency, the Elliott plan would involve a R$9 billion (US$2.9 billion) capital injection that would give the U.S. investment firm a majority stake in the carrier.
A statement issued by the company’s finance and investor relations director, Ricardo Malavazi Martins on Monday (30) noted that Oi’s management team has been meeting regularly with creditors, stakeholders and potential investors to obtain suggestions for the improvement to the judicial recovery plan.
“In these conversations, one of the preliminary alternatives raised would be the immediate delivery of equity to creditors under conditions that have not yet been defined,” read the statement.
This is just one of the many proposal plans for the Brazilian telecom giant since June when the company filed a bankruptcy recovery request, said to be one of the largest such requests in Brazil’s history.
According to local news sources in December a minority group of Oi lenders backed by Egyptian billionaire Naguib Sawiris unveiled an alternative bid for the judicial recovery of the telecom giant. The plan called for creditors to take control of Oi in a debt-for-stock exchange operation in which R$24.82 billion in debt would be exchanged for 95 percent of the company.