Brazil’s Oi Expects Dutch Subsidiaries to Declare Bankruptcy

by San Antonio Attorney

Oi SA, a major telecommunications company in Brazil, announced that Dutch legal authorities may force bankruptcy proceedings for its two subsidiaries in Netherlands, which have the majority of the company’s debt security.

The company stated in a filing that the bankruptcy proceedings in Brazil will hopefully be unaffected by the proceedings in the Netherlands.

Oi, the top 4 wireless carrier in Brazil, file a $19 billion bankruptcy in June.

An estimated 7.35 billion of the bonds are under Portugal Telecom International Finance BV and Oi Brasil Holdings Coöperatief U.A., according to the information provided by the company.

At present, the Dutch subsidiaries are suspending payments as part of its legal status, which shields it from creditors and allows it sort out its finances.

Oi said the Dutch legal administrators may call for the conversion of the payment suspension into bankruptcy.

In case a bankruptcy is instigated, Oi’s assets may be liquidated to settle its debts.

The worth on PTIF’s five percent note payable in November 2019 increased two cents per dollar to 27 cents, the largest intraday increase since June.

Oi has not disclosed the terms that would lead the two Dutch subsidiarues to enter the bankruptcy process.  But its filing stated that the looming bankruptcy of the subsidiaries in the Netherlands is not going to disrupt its operations or Oi’s liquidity in Brazil.

But Oi said it expected that outlook in the Netherlands would not cause substantial effect on the bankruptcy proceedings little by little on the Brazil company.

Oi also pointed out that it is going to commence settling claims in Brazil amounting to 50,000 reais, in an effort repay its small creditors.  The company’s wants to prioritize paying small-sized supplies before its lenders.

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