Oi plan approved by court; extraordinary meeting request struck down

By Caroline Salls

Pittsburgh, Jan. 9 – Oi SA’s judicial reorganization plan has been approved by the 7th Corporate Court of the Capital District of the State of Rio de Janeiro, according to a company news release.

The plan also covers Oi subsidiaries Oi Móvel SA, Telemar Norte Leste SA, Copart 4 Participações SA, Copart 5 Participações SA, Portugal Telecom International Finance BV and Oi Brazil Holdings Coöperatief UA.

Oi said the plan was ratified by the court with exceptions, including a ruling that the ability of the entities under reorganization to make reimbursement of expenses incurred by creditors in the search for payment of their credits is invalid, and conditions providing for the payment of a commitment fee must be extended to all creditors under the same conditions.

According to the release, the plan decision also addressed a call by shareholder Bratel Sarl for an extraordinary general shareholders meeting to deliberate on matters that impact the plan.

Specifically, the judge clarified that “I consider, however, that the pertinent amendments, including to the company’s bylaws, that were approved in the judicial reorganization plan preclude the extraordinary general shareholders meeting and may be carried out by the company’s management bodies, based on the authorization of the creditors’ meeting, as provided for in the Brazilian Reorganization and Bankruptcy Law.”

“The clause of the plan that concerns governance during the transition phase is in line with Article 50 of the Brazilian Reorganization and Bankruptcy Law, and does not violate the Brazilian Corporations Law, insofar as it seeks to confer institutional stability on the corporate bodies and administrators of entities under reorganization for purposes of compliance with the judicial reorganization plan approved with the creditors’ sovereign statement,” the order said.

“Therefore, the convening of an extraordinary general shareholders meeting is absolutely unnecessary to give effect to the sovereign decision of the creditors. On the contrary, in this case, the convening of a shareholders' meeting would reinstall the instability strongly rejected by the judiciary throughout this judicial recovery process.”

The company said it will inform the shareholders, creditors and the market regarding the deadlines to be initiated upon the publication of the judicial decision that ratified the plan.

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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