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Brazil's Oi Files for Bankruptcy Protection 

Brazil's Oi Files for Bankruptcy Protection
The Brazilian telco, Oi has filed for a shock bankruptcy, sending shockwaves through the recession hit country.
Oi is seeking bankruptcy protection from creditors holding USD19.4 billion worth of debt following the failure to renegotiate the debt payments following a number of years of mergers and management changes.

The voluntary bankruptcy filing was triggered after no agreement was reached with bondholders in a negotiation that involved haircuts of up to 75% over the debt's face value.
In a statement, the company said that it will aim to keep serving customers while the courts try to force a restructuring with the debt holders.

The company came under pressure to seek a resolution due to a USD231 million debt which is due to be repaid within the month, but it was struggling to raise fresh debt to roll over the old liabilities.
Oi blamed a number of creditors for the problems with refinancing its debts.

This is the country's largest ever bankruptcy, and while two-thirds of the debt is held by foreign investors, the size of the outstanding debt also puts pressure on Brazil's banks, which are already suffering from a rise in recession related bankruptcies.

Brazil's telecoms regulator Anatel said Oi needs its consent to sell many of its assets or use them as collateral, and will be monitoring the company's operations to protect consumers.
However, the move also strengthens the hand of the three larger mobile networks who may be able to pick over which assets they might be able to buy if Oi is unable to reach a settlement with its creditors.
The company has 60 days to file a recovery plan with the bankruptcy court.
Source: Cellular News