Brazil ‘won’t rescue Oi’ as it goes back into heavy losses
The Brazilian regulator has said neither it nor the government will intervene if operator Oi needs rescuing.
The denial, from Anatel, followed Oi’s report of a net lost in the second quarter of 1.5 billion reais, the equivalent of $390 million.
In the first quarter, Oi seemed to have turned around after years of challenges and bad news. In May it announced a first-quarter profit of $170 million after its bankruptcy reorganisation.
The company also said in May that it was accelerating its fibre expansion plan and was planning to expand the availability of fibre-to-the-home (FTTH) “at an average cost 30% lower than the traditional approach and more commercially efficient, meeting the market demand”.
Oi went into bankruptcy protection in 2016 with debts of $19 billion – the largest corporate failure in Brazil. Most of the money was owned to banks and to Anatel.
But now Anatel has told Reuters in São Paulo that it prefers a market solution for Oi. The regulator denied a newspaper report that the Brazilian government was considering an imminent intervention in the carrier, as it feared the interruption of Oi services next year.
Oi said its loss was worsened because of debt-servicing costs and because the local currency fell against the dollar.