Brazil’s Oi Requests Court to Extend Judicial Recovery Deadline

RIO DE JANEIRO, BRAZIL – After the market closed on Friday, December 6th, Oi announced that it had petitioned the 7th Business Court of Rio de Janeiro for an extension of its judicial recovery deadline.

Originally, the court proceeding would end on February 4th, 2020, two years after the filing of the original reorganization petition.

Oi argues that this extension after two years is a “logical measure” that has been used in most judicial reorganization proceedings, and that “it has already completed most of the stages established in the proceeding”.

In addition, the company advises that the execution of the strategic plan has already begun to give positive results in operational and financial indicators, and it will be fast-tracked as of 2020 and consolidated in 2021.

It is investing in the fiber optics network extension with a focus on fixed broadband using FTTH technology, leaving mobile telecommunications somewhat on the sidelines (although it has confirmed its participation in the 5G frequency auction).

The operator says that “the non-termination of judicial supervision does not affect the current situation of Oi Companies and has no impact on compliance with the plan in force, nor on current credits and any new resources that may be accessed”.

Oi recorded a R$5.7 billion loss in the 3rd quarter

The news came in the same week that Oi released (late) its financial results for the third quarter of 2019. The operator recorded a loss of R$5.7 billion and a net debt of R$14.7 billion, in addition to a drop in the total number of customers.

Oi has been the target of sales speculation of its mobile operations branch. At the conference disclosing the results, its CEO stated that he relies on the help of financial consultants to assess the mobility business and that there is interest in selling if there is an opportunity for consolidation.

Competitors Claro, TIM, and Vivo have already shown interest.