Oi to offer restructuring plan as shareholder calls to oust board
Bankrupt Brazilian operator Oi has called an emergency shareholders meeting on 8 September which may see six of its nine board directors ousted, including those representing the majority shareholder.
Oi filed for creditor protection in June, saying it was $21 billion in debt. It is Brazil’s largest ever bankruptcy.
Separately, Oi’s CEO Marco Schroeder said yesterday that the company will present a restructuring later in August or by early September. He told reporters that suppliers and creditors will be offered terms of the business reorganisation plan, which involves a debt-for-equity swap. He declined to elaborate, said Reuters.
The September meeting is the result of a call by minority shareholder Societé Mondiale, an activist investor which started buying shares in the company around the time of the bankruptcy. According to Brazilian law, the interests of shareholders are protected in a bankruptcy – not wiped out, as they are in the US and many other countries. Societé Mondiale owns an estimated 7% of Oi.
According to Reuters, Societé Mondiale, a fund controlled by Brazilian investor Nelson Tanure, is also proposing to annul the March 2015 shareholders meeting, which gave final approval to the merger between Oi and Portugal Telecom. French group Altice later bought the operations of Portugal Telecom from Oi.
The investor also wants the company to seek damage claims against former managers and the Santander bank, which advised Oi on the merger, says Reuters.