The slightly confusing saga of Brazilian operator Oi continues. It is now seeking a huge sum of money in emergency funding.
In other words, the judicial process involving the recovery plan of Brazilian service provider Oi, which seemed to be over in December, may be far from finished.
Now Oi plans to seek emergency funding of at least 4 billion reais (about US$805.3 million) as well as to renegotiate debts.
The company’s board approved the plan last Friday. We may have to wait for more precise details of the measures Oi and its subsidiaries will adopt in order to strengthen its capital structure. However, the emergency funding will, one assumes, support the company while it carries out some of the measures provided for in the plan, including a capital increase and divestment of assets.
It has already sold a number of assets but, according to local news source TeleTime, it may now sell almost everything else, including its corporate arm, Oi Solucoes and its stake in fibre-to-the-home (FTTH) wholesale unit V.tal.
Quoted in the same news source, the company apparently says that the plan reflects the negotiations held to date with its main creditors and other stakeholders for debt restructuring. It adds: “We continue negotiations with financial creditors and other unsecured creditors regarding the specific terms and conditions.”
Oi has been under judicial protection since mid-March this year. Its judicial reorganization plan was granted by Rio de Janeiro’s 7th Corporate Court. However, as we reported at the time, the company’s board also had a 60-day deadline to submit to regulator Anatel various details of cash flow, sources of funds and financial forecasts and, notably, “justification for the differences between what was realized and what was foreseen”.