Oi, which has 74 million customers, filed for bankruptcy in Brazil in June, owing money to banks and Brazil’s regulator. Now a US judge has given Oi chapter 15 bankruptcy protection, the equivalent for foreign companies of the more usual chapter 11 of US bankruptcy laws.
According to reports a hedge fund, Aurelius Capital Management, has built up shares in Oi while a group of 70 bondholders, operating as an ad hoc steering committee, has been working towards a restructuring of the company.
A Brazilian court has appointed accountants PricewaterhouseCoopers Assessoria Empresarial and a law firm, Escritorio de Advocacia Arnoldo Wald, as Oi’s administrators. They will oversee the recovery process, said the court.
According to court papers, Oi is blaming a “perfect storm of economic strain at the corporate, sector-wide, and national level”, but the company built up debt merging with Brasil Telecom and then in a failed merger with Portugal Telecom, which later became part of French group Altice. CEO Bayard Gontijo resigned in June.