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Brazilian telco Oi has filed for the local version of Chapter 11. The bankruptcy is the largest-ever in Brazilian history, and badly affected most other leading Brazilian companies which have already been badly affected by the Brazilian economic crisis.
Oi has filed from protection from its creditors having failed to reach a restructuring with its debtors. It is some 65 billion Reals ($19 billion) in debt. It also filed June 21st for Chapter 15 protection in the US.
Oi blamed Aurelius Capital Management and other lenders for its decision to seek protection from creditors, according to a filing in Manhattan bankruptcy court. “The threat of additional adverse actions by creditors and the need for a centralised forum to facilitate its reorganization compelled the company to begin preparations for a formal judicial restructuring,” Oi said. Aurelius has been battling Oi in court over the phone carrier’s debt-related transactions.
Egyptian billionaire Naguib Sawiris is reportedly looking to acquire the assets.
Oi is Brazil’s 4th-largest telco. Brazil’s telecommunications regulator Anatel said Oi needs its consent to sell many of its assets or use them as collateral. The agency will be monitoring the company’s operations to “protect the user.” Anatel, which controls licenses to operate telecommunications networks, is unlikely to intervene if Oi can continue to provide good service, according to Bloomberg.