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Oi board of directors approves changes to judicial reorganization plan
By Caroline Salls
Pittsburgh, March 23 – Oi SA’s board of directors approved the basic financial conditions of adjustments to the company’s judicial reorganization plan, according to a news release.
The executive officers and advisers were approved by the board to file an amendment to the plan with the 7th Corporate Court of the State of Rio de Janeiro as soon as possible.
Under the revised plan terms:
• Terms for class 2 claimants that do not opt for conversion will include a six-year grace period for principal and a nine-year grace period for semiannual non-linear amortization. There will be a four-year interest grace period, and the interest rate will remain unchanged;
• Terms for class 3 claimants that do not opt for conversion will include a six-year grace period for principal and interest and a 10-year grace period for semiannual non-linear amortization. The interest rate on this debt will be 1.25%; and
• Creditors that opt for conversion will receive a combination of shares representing 25% of post-money capital and R$2.8 billion in 6% bond payment-in-kind bonds due 2027 and R$3.9 billion in 6% callable and convertible bonds.
The callable convertible bonds will be callable semiannually with a cash sweep of 100% of the net value of the sale of Africatel assets until the 36th month.
The bonds will be convertible at the 36th month if no redemption into an additional 17% of post-conversion capital.
Oi is a Rio de Janeiro-based telecommunications service provider. It filed for Chapter 15 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on June 21, 2016 under case number 16-11791.
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