Brazil's Oi proposes 25 percent limit to debt-for-equity swap (updated)

Pharol SGPS SA

12/10/2017 01:57

(Adds details of debt-for equity swap) 
    BRASILIA/RIO DE JANEIRO, Oct 11 (Reuters) - Brazilian phone 
carrier Oi SA submitted a plan on Wednesday to restructure its 
65.4 billion-real ($21 billion) debt burden with a proposal to 
limit the debt-for-equity swap demanded by creditors to 25 
percent of capital.  
    The plan was delivered to a Rio de Janeiro court and 
creditors of the largest-ever bankruptcy proceeding in Latin 
America will vote on it on Oct. 23.  
    Oi proposes to inject up to 9 billion reais, of which 6 
billion reais would come from a stock offering and the rest 
through the debt-for-equity swap.  
    The company agreed to raise the company's annual capital 
expenditures to 7 billion reais from 5 billion, as previously 
demanded by creditors.  
    The conversion of the existing debt would be limited to 25 
percent of the company's capital, but creditors may reach a 
larger stake in Oi by participating later in the stock offering 
planned by Oi.   
    In August, the two largest creditor groups, the 
International Bondholder Committee and the Ad-Hoc Group of Oi 
bondholders said they would agree to swap 26.1 billion reais 
worth of their bond holdings for 88 percent of the company's 
equity.  urn:newsml:reuters.com:*:nL2N1MD24A 
    The in-court reorganization began a year and a half ago and 
has been marked by conflicts between shareholders led by Pharol 
SGPS SA  PHRA.LS  and Societé Mondiale FIA, bondholders and 
Brazil's telecom regulator, Anatel. 
 
 (Reporting by Leonardo Goy in Brasilia and Rodrigo Viga Gaier 
in Rio de Janeiro; Writing by Tatiana Bautzer; Editing by 
Cynthia Osterman and Peter Cooney) 
 ((tatiana.bautzer@tr.com; Tel: +55-11-5644-7756; Mob: 
+55-119-4210-4173; Reuters Messaging: 
tatiana.bautzer.thomsonreuters.com@reuters.net)) 
 
Keywords: OI SA RESTRUCTURING/