Oi board OKs plan to raise $2.5bn in route out of $19bn bankruptcy

By:
Alan Burkitt-Gray
Published on:

A year after bankruptcy protection, Brazil’s Oi board plans to raise money to re-start network investments

The board of Brazil’s bankrupt operator, Oi, has approved a plan to raise the equivalent of $2.5 billion in order to try and re-start the company’s investments.

Oi went bust in June 2016 owing $19 billion to banks and the Brazilian regulator, Anatel. A proposal earlier this year from Egyptian telecoms entrepreneur Naguib Sawiris appears to have lapsed.

Reuters reports that Oi, which employs 140,000 people, will raise the $2.5 billion from existing shareholders and investors and the proceeds will be invested in broadband and wireless coverage. The agency quotes CEO Marco Schroeder saying the money “will allow a new cycle of investments and growth at Oi”.

Oi’s plan is supported by two of the company’s biggest shareholders, Pharol SGPS and Société Mondiale Fundo de Investimento, which together hold about 35% of the voting capital.

Last month the company said via newspaper advertisements that it would make early repayments of debts to small and medium creditors, up to a maximum of $15,000 each.