Brazil's Oi sees vote on updated debt plan by end of June -CEO (updated)

Pharol SGPS SA

23/03/2017 16:13

(Adds conference call and debt plan details throughout) 
    By Ana Mano 
    SAO PAULO, March 23 (Reuters) - Brazilian telephone operator 
Oi SA  OIBR4.SA  expects a new in-court reorganization plan to 
go to a creditor vote by the end of June, Chief Executive 
Officer Marco Schroeder said on Thursday. 
    Changes to the plan revealed late on Wednesday would offer 
Oi's financial creditors 25 percent of its equity and 
convertible bonds to be called in three years, at which point 
they could own up to 38 percent of the company's shares. 
    A proposal submitted in September did not include an 
immediate debt-for-equity swap. 
    In a conference call with investors and analysts, Schroeder 
said the updated plan has not yet been submitted to the Rio de 
Janeiro court where the debt-laden company filed in June for 
relief on 65 billion reais ($21 billion) of debt. It was 
Brazil's biggest-ever bankruptcy protection case.  urn:newsml:reuters.com:*:nL1N19C0MW 
    Oi's common shares  OIBR3.SA  rose 11 percent in midday 
trading on Thursday, on track for their biggest intraday gain in 
nearly three weeks.    
    The updated proposal is part of Oi's efforts to fight off 
proposals from outside bidders, some of whom have the backing of 
key creditors. 
    "Though we are happy investors are interested in Oi, showing 
the company has value, we feel our proposal is a balanced one," 
Schroeder said, adding that the plan should be submitted to the 
court in its current form. 
    In December, Oi received a binding proposal from a group of 
bondholders supported by Orascom TMT Holdings SAE to inject up 
to $1.25 billion into the carrier.  urn:newsml:reuters.com:*:nL2N1GE17M 
    The Orascom-backed option also entails a debt-for-equity 
swap involving 24.82 billion reais worth of bond debt, which 
would be exchanged for a 95 percent stake in the carrier.  
    On March 1, the group gave Oi another month to respond to 
the offer. Schroeder said alternative reorganization strategies 
are welcome as long as they have the support of current 
stakeholders in the company.  
    Cerberus Capital Management and Paul Singer's Elliott 
Management Corp are also said to be in talks with 
Oi. urn:newsml:reuters.com:*:nL1N1FH1N9 urn:newsml:reuters.com:*:nL1N1FU0XM 
    A court-appointed administrator for Oi will publish an 
updated list of claims by the end of April, Schroeder said.  
    Creditors will have 30 days to challenge the revised claims 
list, after which the judge may call a creditor assembly to vote 
on the plan, Schroeder added.  
    Oi lost 3.3 billion reais in the final quarter of 2016, a 
narrower loss from the comparable quarter in 2015 due to cost 
cutting and lower financial expenses. 
    ($1 = 3.14 reais) 
 
 (Reporting by Ana Mano; Editing by Paul Simao) 
 ((ana.mano@thomsonreuters.com; Tel: +55-11-5644-7704; Mob: 
+55-119-4470-4529; Reuters Messaging: 
ana.mano.thomsonreuters.com@reuters.net)) 
 
Keywords: OI SA RESTRUCTURING/