Exhibit 99.5
Capitalized terms used herein but not defined herein have the meanings set forth in the prospectus filed by Oi S.A. – In Judicial Reorganization (“Oi”) with the U.S. Securities and Exchange Commission (the “SEC”) on November , 2018 (the “Prospectus”). Please note that the offer referenced in this letter is being made in the United States pursuant to the Prospectus.
A copy of the Prospectus will not be delivered to you unless you specifically request it. The Prospectus may be obtained by visiting the Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system of the SEC at the website www.sec.gov/edgar.shtml. Pursuant to Rule 173 of the Securities Act of 1933, as amended, you are hereby deemed to have access to the Prospectus. If you would like to request that a copy of the Prospectus be mailed to you please call the Information Agent, D.F. King & Co. Inc., at800-628-8536 (toll-free) between the hours of 9:00 a.m. (New York City time) and 9:00 p.m. (New York City time), Monday through Friday, ore-mail oi@dfking.com.
FORM OF LETTER TO BROKERS AND OTHER SECURITIES INTERMEDIARIES
OI S.A. – IN JUDICIAL REORGANIZATION
Offering of 3,225,806,451 New Common Shares, which may be represented by
New American Depositary Shares
Offer Price: R$1.24 per New Common Share
U.S. dollar equivalent of R$6.20 per New Common American Depositary Share
Offered Pursuant to Rights Distributed to
Qualifying Shareholders and Qualifying ADS Holders (as defined below)
of Oi S.A. – In Judicial Reorganization
November 23, 2018
To Brokers and Other Securities Intermediaries:
This letter is being sent to you in connection with a rights offer (the “Rights Offer”) by Oi S.A. – In Judicial Reorganization (“Oi”) because you hold Common ADSs (as defined below) and/or Preferred ADSs (as defined below), in each case, in your DTC participant account. If you are holding for clients, we are asking you to contact your clients for whom you hold Common ADSs or Preferred ADSs to obtain their instructions.
The Rights Offer consists of:
| • | the “Share Rights Offer,” in which holders (the “Qualifying Shareholders”) of Oi’s common shares (the “Common Shares”) and Oi’s preferred shares (the “Preferred Shares”) as of 5:00 p.m. (Brasília time) on November 19, 2018 (the “Share Rights Record Date”) will receive transferable rights (the “Common Share Rights”) to subscribe for new Common Shares (the “New Common Shares”); and |
| • | the “ADS Rights Offer,” in which holders (the “Qualifying ADS Holders”) of American Depositary Shares (“ADSs”) each representing five Common Shares (the “Common ADSs”), and holders of ADSs, each representing one Preferred Share (the “Preferred ADSs”), as of 5:00 p.m. (New York City time) on November 21, 2018 (the “ADS Rights Record Date”) will receive transferable rights (the “Common ADS Rights”), to subscribe for new Common ADSs (the “New Common ADSs”). |
In the Rights Offer, Oi is distributing (1) to each Qualifying Shareholder, at no charge, 1.333630 Common Share Rights per Common Share or Preferred Share held, and (2) to each Qualifying ADS Holder, at no charge, 1.333630 Common ADS Rights per Common ADS held and 0.266726 Common ADS Rights per Preferred ADS held. Only whole numbers of Common Share Rights and Common ADS Rights will be issued and all entitlements will be reduced to the next lower number of whole Common Share Rights or Common ADS Rights, as the case may be.
Each Common ADS Right will entitle the holder thereof to subscribe for one New Common ADS during the period commencing at 9:00 a.m. (New York City time) on November 23, 2018 and ending at 5:00 p.m. (New York City time) on December 17, 2018 (the “ADS Subscription Period”) at the U.S. dollar equivalent of five times the New Common Share Subscription Price of R$1.24 in cash per New Common ADS subscribed (the “New Common ADS Subscription Price”).
Holders of Common ADS Rights who exercised their Common ADS Rights will also have the ability to manifest their intention to acquire up to all of the Excess New Common ADSs at the New Common ADS Subscription Price by making a subscription request at the time that they exercise their Common ADS Rights. If not all of the New Common Shares are taken up initially in the Rights Offer as a result of the subscription of the New Common Shares to which holders of Common Share Rights (including the Brazilian custodian of the Common Shares and Preferred Shares underlying the Common ADSs and Preferred ADSs) are entitled, Excess New Common ADSs will be allocated to holders of Common ADS Rights who made subscription requests for Excess New Common ADSs in accordance with the allocation principles described in the Prospectus (as defined below).
To validly subscribe for New Common ADSs (including Excess New Common ADSs), a holder of Common ADS Rights must deposit with The Bank of New York Mellon, as ADS Rights Agent (the “ADS Rights Agent”) in cash US$2.03 per New Common ADS subscribed or requested (the “New Common ADS Deposit Amount”), which is equal to US$1.69 (the U.S. dollar equivalent of five times the New Common Share Subscription Price based on the closing rate for the sale of U.S. dollars against thereal as reported by the Brazilian Central Bank on October 26, 2018, the date on which the board of directors of Oi authorized the Rights Offer) per New Common ADS subscribed or requested,plus 20% of such amount to cover (1) currency rate fluctuations from October 26, 2018 to the date on which the ADS Rights Agent converts currency in connection with the exercise by the ADS Custodian of the New Common Shares underlying the initial New Common ADSs or the Excess New Common ADSs, as the case may be, (2) the ADS Issuance Fee of US$0.05 per New Common ADS, and (3) any other applicable fees, expenses or taxes. The ADS Rights Agent will return unused amounts to holders. Fractions of New Common ADSs and fractional entitlements under the ADS Rights Offer will be reduced to the nearest whole number of New Common ADSs.
The Common ADS Rights will trade on the NYSE on a “when-issued” basis beginning at 9:30 a.m. (New York City time) on November 19, 2018, and on a “regular way” basis beginning at 9:30 a.m. (New York City time) on November 26, 2018. Trading in Common ADS Rights will cease at 4:00 p.m. (New York City time) on December 12, 2018. The Common ADS Rights will trade under the ticker symbol “OIBR RT.” The CUSIP number for the Common ADS Rights is P7353Y 106.
Holders are not required to exercise their Common ADS Rights. Common ADS Rights that are not exercised during the ADS Subscription Period will be void and will have no value. No arrangements will be made to sell any unexercised Common ADS Rights on a holder’s behalf. Accordingly, holders will not receive any proceeds with respect to unexercised Common ADS Rights.
If you or your client wishes to purchase New Common ADSs through the ADS Rights Offer, you must deliver completed subscription instructions through DTC’s automated system indicating the total number of New Common ADSs (including Excess New Common Shares, if any) that you wish to subscribe for and instruct DTC to charge your applicable DTC account for the New Common ADS Deposit Amount for such New Common ADSs (including Excess New Common Shares, if any) and to deliver such amount to the ADS Rights Agent. DTC must receive the subscription instructions and the payment of the New Common ADS Deposit Amount for the New Common ADSs (including Excess New Common Shares, if any) so as to allow DTC sufficient time to transmit the subscription instructions and payment of the Common ADS Deposit Amount to the ADS Rights Agent prior to the expiration of the ADS Subscription Period. If the instructions and deposit amount payment with respect to the New Common ADSs are not received by the ADS Rights Agent by the end of the ADS Subscription Period, the ADS Rights Agent will not be authorized to, and consequently will not, accept any delivery or exercise of subscription instructions with respect to those New Common ADSs.
All commissions, fees and other expenses (including brokerage commissions and transfer taxes), incurred in connection with the exercise of the Common ADS Rights will be for the account of the holder of the Common ADS Rights, and none of such commissions, fees or expenses will be paid by Oi, the Rights Agent or D.F. King & Co., Inc., our information agent for the ADS Rights Offer (the “Information Agent”).
Subscriptions for New Common ADSs (including Excess New Common ADSs) with the Rights Agent are irrevocable and may not be cancelled or modified.
A Common ADS Rights holder that wishes to exercise Common ADS Rights must take action in time to ensure that the instructions and payment will reach the ADS Rights Agent prior to 5:00 p.m. on December 17, 2018.
Enclosed are copies of a form of letter that may be sent to your clients for whose accounts you hold Common ADSs or Preferred ADSs.
If you have any questions or need further information about the Rights Offer, please contact the Information Agent, D.F. King & Co., Inc., by telephone at800-628-8536 (toll free) or by email at oi@dfking.com.
Sincerely,
OI S.A. – IN JUDICIAL REORGANIZATION
NOTHING IN THE PROSPECTUS OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF OI S.A. – IN JUDICIAL REORGANIZATION, THE ADS RIGHTS AGENT, THE INFORMATION AGENT OR ANY OTHER PERSON MAKING OR DEEMED TO BE MAKING OFFERS OF THE SECURITIES ISSUABLE UPON VALID EXERCISE OF THE COMMON ADS RIGHTS, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO SUCH OFFERINGS EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS.
