A group of Oi creditors and Egypt’s Orascom TMT Investments have presented an alternative restructuring plan for the Brazilian telecommunications company, offering in part to swap BRL24.8bn ($7.35bn) in outstanding bonds for a 95% equity stake.
The plan also calls for BRL37bn in investments in five years “in order to catch-up with an extended period of underinvestment,” the bondholders and Orascom said in a statement.
The bondholders, represented by Moelis & Co, and Orascom, led by Egyptian businessman Naguib Sawiris, also offered to raise $1.25bn in capital, with $1bn raised through a public share offering and $250m from Orascom. Existing shareholders can buy up to 50% of the offering and retail investors can buy up to 10%.
“The creditors backstopping the public offering include some of the most prominent names in the business and collectively manage over $175bn in assets,” Moelis’ Otavio Guazzelli said.
The plan includes extending the tenors on Oi’s bank and export credit agency debt.
Law firm Cleary Gottlieb is representing the bondholders on the proposal.
Oi’s shares dropped 0.81% to BRL2.44 after the alternative plan was announced on Friday.
The bondholders rejected Oi’s restructuring proposal in September, saying it favored the controlling shareholders over creditors. Oi opened talks with bondholders in April and filed the largest bankruptcy protection case in Brazil in June.