Brazilian phone carrier Oi to amend terms to creditors -filing

Pharol SGPS SA

04/11/2017 20:48

SAO PAULO, Nov 4 (Reuters) - The board of Brazils Oi SA 
 OIBR4.SA  has approved a change to the restructuring proposal 
of the debt-laden telecom provider to be submitted to creditors 
on Monday, the company said in a securities filing.  
    Terms of the proposed changes will be filed by the company 
with the court in Rio de Janeiro that oversees Latin Americas 
largest-ever bankruptcy proceeding, which aims to restructure 65 
billion reais in debt. 
    The board on Friday approved an agreement proposed by a 
small group of creditors known as G6, which had been negotiating 
with controlling shareholder Pharol SGPS SA  PHRA.LS  and key 
minority shareholder Nelson Tanure. 
    Once the terms have been filed with the court, Oi will try 
to gather support from the creditors needed to approve it at a 
Nov. 10 creditors' assembly, which will decide on the company's 
future.  
    The filing on Saturday did not elaborate on which changes 
were made to the plan. Reuters reported this week that the plan 
put forth by distressed asset funds such as Attestor Capital LLP 
and Centerbridge Partners LP includes payments to the 
bondholders that commit to providing new capital to the company. 
 urn:newsml:reuters.com:*:nL2N1N71LS 
    The board also formally rejected the alternative proposals 
by the groups of creditors Ad Hoc Group of Oi Bondholders and 
International Bondholders Committee, advised by Moelis & 
Company, G5 Evercore and FTI.  
    These groups of creditors, which together hold around 23 
billion reais ($7 billion) in debt, had submitted a proposal 
that would leave them with 88 percent of Oi's equity in exchange 
for the debt. In the filing, Oi said "their proposal treats 
stakeholders unequally ... and brings uncertainty and delay to 
the bankruptcy protection process".  
    Oi's last proposal limited the debt-for-equity swap to 25 
percent of the company's capital. The proposal was shunned by 
the largest creditors, who said it failed to address most 
concerns.  urn:newsml:reuters.com:*:nL2N1MO0UU 
    The largest creditors protested on Saturday against the 
board's decision. In a statement, the Ad Hoc and the 
International Bondholders Committees said the board is "holding 
the company hostage" and the amended plan has "the only goal of 
defending current shareholders' interests, even against the 
company." 
    Should creditors reject the restructuring proposal, the 
company could be liquidated. The main bondholders want to avoid 
that at all costs, two people with knowledge of the situation 
told Reuters last month, saying the main bondholders would stand 
to lose more if the company were liquidated than if the 
bondholders accepted the Tanure-backed terms.  
 ($1 = 3.28 reais) 
     
 
 (Reporting by Tatiana Bautzer; Editing by Matthew Lewis) 
 ((tatiana.bautzer@tr.com)(+55-11-5644-7756)(Reuters Messaging: 
tatiana.bautzer.thomsonreuters.com@reuters.net)) 
 
Keywords: OI SA RESTRUCTURING/