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.
BRASILIA/RIO DE JANEIRO (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.
The in-court reorganization began a year and a half ago and has been marked by conflicts between shareholders led by Pharol SGPS SA and Societé Mondiale FIA, bondholders and Brazil’s telecom regulator, Anatel.
