Oi’S Creditors Approve $1 Billion Sale Of Broadband Unit To V.Tal

(MENAFN- The Rio Times) Oi, the Brazilian telecom company, has taken a significant step towards ending its judicial recovery. On Tuesday, October 8, creditors approved the sale of ClientCo, Oi's broadband unit, to internet company V.tal after two auction rounds.

This deal is somewhat of an inside job, as Oi holds a minority stake in V.tal. BTG Pactual controls the neutral network company, which now aims to acquire Oi's broadband division.

Creditors had ten days from the late September auction to approve or reject V. Tal's proposal. This decision marks a crucial stage in Oi's debt restructuring process.

V.tal offered to purchase Oi's broadband division for R$ 5.683 billion ($1.024 billion) during the auction held at the Rio de Janeiro Court of Justice. This was the only bid received that day.

The operation received approval from restructuring option I creditors and unsecured ToP debt 2024/2025 Reinstated - Option I creditors. However, some creditors requested more information about certain aspects of the agreement.



V. Tal's proposal does not involve cash payment. Instead, it includes a share swap, debt forgiveness, and operator commitments. The neutral network operator plans to issue R$ 4.99 billion ($899.1 million) in shares for ClientCo.

The offer also includes R$ 375 million ($67 million) from extrajudicial credits held by V.T. against O and R$ 308 million ($55 million) in debentures. These terms reflect the complex nature of the deal.
Oi's Judicial Recovery Process
Oi's administration expects to integrate the revised proposal with clarifications into the judicial recovery files within a day of receiving the document. This step will further solidify the agreement.

The recent deal with regulators to shed fixed telephony regulatory costs brings some relief to Oi. The operator, currently valued at just over R$ 1.6 billion ($288 million) on B3, faces its second judicial recovery process.

In July's first auction round, Ligga Telecom, linked to businessman Nelson Tanure, bid R$ 1.05 billion ($189 million) for the former Oi Fibra. However, this fell short of the R$ 7.3 billion ($1.315 billion) minimum set in Oi's recovery plan.

Creditors rejected Ligga's offer in late July, leading to a second auction round. V. Tal emerged as the sole bidder after the court initially allowed, and then barred Ligga's participation.

The court sided with V. Tal's argument that Ligga should provide new compliance documents for the second auction. This decision effectively removed Ligga from the competition, paving the way for V. Tal's bid.

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