Oi: 'We're in judicial recovery, not bankruptcy'

Bnamericas Published: Thursday, May 24, 2018

After more than two years of intense negotiations with creditors and various legal disputes, Brazilian telecom operator Oi has vowed to put the stigma surrounding its judicial recovery process behind it in an effort to curtail speculation and misconceptions that are undermining the company's ability to bounce back.

"We're in judicial recovery, not bankrupt. The judicial recovery is an opportunity for recovery," Oi's CEO Eurico Teles said at the Painel Telebrasil telecoms summit in Brasília.

In his presentation, Teles outlined the arduous process that led to the approval of a restructuring plan by creditors in December and which included the resignation of board members and the company CEO.

The CEO declared that Oi will emerge from its reorganization at a new market level that is in line with its status, stressing that the telco has 54,000 direct employees, serves 5,000 municipalities (2,000 of which are served solely by Oi), and a backbone network of 360,000km.

According to Teles, Oi had 5.5bn reais (US$1.5bn) in cash before the recovery process and has now 6.8bn reais.

He said the company was focused on "settling its monstrous debt of 64bn reais" and is negotiating the reduction of the private sector part of the debt from 49bn reais to 14bn reais.

The executive stressed that the telecommunications services provider is complying with the steps set out in the judicial recovery plan, which include a new capital increase for 4bn reais in the second half of the year.

"We were in Barcelona in February for the Mobile World Congress, and our suppliers were enthusiastic to talk to us," he said.

Meanwhile, Teles called for the approval of the PLC 79 bill, which amends the general telecommunications law, arguing that the modernization of the legislation is imperative to bring new resources into the sector. PLC 79 transfers the funds spent on services that no longer serve the population, such as the payphones, to broadband instead.

By way of example, he pointed out that Oi spent 320mn reais last year to maintain public payphones, which are now largely unused, but collected only 5.4mn reais in revenues from them.

To continue reading, subscribe to BNamericas to get all the information in this article and access to related news items and reports.

Subscribe to BNamericas and gain access to thousands of project profiles, key contacts and news.

Other projects

Get key information on thousands of projects in Latin America, from current stage, to capex, related companies, key contacts and more.

  • Project: Cachinal
  • Current stage: Blurred
  • Updated: 6 days ago

Other companies in: ICT (Brazil)

Get critical information about thousands of ICT companies in Latin America: their projects, contacts, shareholders, related news and more.

  • Company: Info4 Tecnología Ltda.  (Info4)
  • Info4 Tecnología Ltda. (Info4) is a Brazilian communication agency aimed at monitoring, managing and analyzing information and media in Brazil and Latin America since 1999. Info...
  • Company: Máquina Cohn & Wolfe  (Máquina)
  • Brazilian company Máquina is a public relations agency, part of Cohn & Wolfe and the WPP Group. Its services comprise strategic planning; integrated digital communications, whic...
  • Company: Aloo Telecom
  • Aloo Telecom, founded in 2003, is a Brazilian operator of telecommunication services for public, private and residential customers, owning a 25,000km fiber optic network and inf...
  • Company: Padtec S.A.  (Padtec)
  • Padtec S.A., founded in 2001, is a Brazilian manufacturer and provider of optical solutions serving the network operators, IT and multimedia, government, utilities, finance, and...
  • Company: Alta Rail Technology
  • Alta Rail Technology (ART); founded in 2003 by the merger between ALL Rail Tech, Daiken, and Engesis; is a Brazilian provider of technological solutions for the rail business, w...
  • Company: Cargo X
  • Launched in 2016, CargoX is an "asset-free" cargo transport e-commerce services company that connects self-employed truck drivers in Brazil to shippers in need of logistics serv...
  • Company: GAS Tecnologia  (GAS)
  • GAS (Global Antifraud Solution), a Brazilian company belonging to the Diebold Nixdorf group, provides digital fraud protection for the banking sector. This company offers soluti...
  • Company: Hispamar Satélites
  • Hispamar Satélites (Hispamar) is located in Rio de Janeiro, Brazil and is a subsidiary of Hispasat Group, a Spanish telecommunication satellite operator. Hispamar was founded in...