Sawiris ‘in plan to rescue’ Brazil’s Oi

Alan Burkitt-Gray
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Orascom founder Naguib Sawiris is said to be planning a rescue bid for bankrupt Brazilian operator Oi

Egyptian businessman Naguib Sawiris is expected to put forward a $12 billion plan this week to rescue Brazilian fixed-line operator Oi, which is under bankruptcy protection.

The deal would see bondholders own about 95% of the company, according to a report by Bloomberg, citing a “person with a direct knowledge of the matter”.

Sawiris, who founded telecoms operator Orascom – now absorbed into VimpelCom – will put $1.2 billion of new money into Oi, which has debts of around $19 billion.

Oi went into bankruptcy protection in June and filed its own recovery plan in September, but it has been rejected by bondholders. Sawiris is working with the bondholders, said Bloomberg.

The company owes $2.9 billion to the regulator, Anatel, and almost as much to state-run banks. A number of private equity companies are in talks with Oi about alternative rescue deals.

In 2014 Oi was at the centre of a plan to create a transatlantic Portuguese-language operator, covering Portugal and Angola as well as Brazil. The company planned to merge with Portugal Telecom but the tie-up met with stumbling blocks such as financial irregularities over the Portuguese operator’s dealings with its largest bank investor, Banco Espírito Santo.

In late 2014 Oi agreed to sell its Portuguese business to French group Altice for €7.4 billion, a deal completed in June 2015.