Arbitrator suspends capital hike for Brazil telecom Oi

Pharol SGPS SA

29/10/2018 16:10

SAO PAULO, Oct 29 (Reuters) - An arbitration chamber run by
Brazil's Sao Paulo Stock Exchange has temporarily suspended a
capital hike planned by Oi SA  OIBR4.SA  in order to adjudicate
a dispute between the major telecommunications company and a
shareholder.
    In a statement on Monday, Oi shareholder Pharol SGPS SA
 PHRA.LS  said it had been given until Nov. 5 to present
additional arguments to the body regarding the legality of the
planned capital raise.
    Last December, creditors in Oi, Brazil's largest fixed line
telecom company, approved a plan to restructure about 65 billion
reais ($17.7 billion) in debt after 18 months of testy
negotiations between bondholders and shareholders. As part of
that plan, key creditors had agreed to inject an additional 4
billion reais into the company to allow for needed capital
expenditures and to improve its debt profile.
    Just last week, Oi said that the plan had been approved by a
bankruptcy court in Portugal, an important step that sent Oi
shares higher. Oi shares erased most of their gains on Monday,
with common shares falling 2.7 percent in early afternoon trade.
    In a statement, Oi said it had rigorously complied with
court orders, had received approval for its plans from
bankruptcy courts, and would hold Pharol legally responsible for
any delays in the capital hike that could cause financial
losses.
    It added that the arbitrator's decision was "provisional"
and could be changed.
    ($1 = 3.67 reais)

 (Reporting by Gram Slattery; Editing by David Gregorio)
 ((gram.slattery@thomsonreuters.com; +55-11-5644-7714))