| BASIS OF PRESENTATION | 1.
BASIS OF PRESENTATION
Oi S.A.—Under Judicial Reorganization – Debtor-in-Possession
The Company is headquartered in Brazil, in the city of Rio de
Janeiro, at Rua do Lavradio, 71 – 2º andar.
The Company also holds: (i) through its wholly-owned
subsidiary Telemar Norte Leste S.A.—Under Judicial
Reorganization – Debtor-in-Possession Debtor-in-Possession
The local and nationwide STFC long-distance concession agreements
entered into by the Company and its subsidiary Telemar with ANATEL
are effective until December 31, 2025. These concession
agreements provide for reviews on a five-year basis and in general
have a higher degree of intervention in the management of the
business than the licenses to provide private services, and also
include several consumer protection provisions, as perceived by the
regulator. On December 30, 2015, ANATEL announced that the
review to be implemented by the end of 2015 had been postponed to
April 30, 2016. Subsequently, On April 29, 2016, ANATEL
decided, under a Resolution Circular Letter, to postpone until
December 31, 2016 the execution of the revised
agreements. On December 30, 2016 and under a Resolution
Circular Letter, ANATEL postponed again the execution of the new
concession agreements up to June 30, 2017. On June 29,
2017, ANATEL informed, in an official letter, that it would no
longer make any further amendments to the concession agreements at
this instance. Note that until the end of the concession agreement
on December 31, 2025 there would still be a period for
revision, on December 31, 2020. It is worth noting that
Congress Bill 79/2016 provides for a special amendment of
concession agreements to adjust them to the possibility of
migrating from a public utility regime to an STFC service provision
under a private law regime. Thus, if this bill is passed into law,
the concession agreement is subject to amendment in any date other
than December 31, 2020. Throughout the years, ANATEL initiated
some procedures aiming at monitoring the Company’s financial
situation, as well as to assess the Company’s ability to
discharge its obligations arising from the terms of the concession
agreements. In light of the approval of the Judicial Reorganization
Plan by the creditors and its subsequent ratification by the
competent court ANATEL started to monitor the Oi Group
Companies’ operating and financial positions based on the
effectiveness of said Judicial Reorganization Plan (JRP).
In Africa, the Company provides fixed and mobile telecommunications
services indirectly through Africatel Holding BV
(“Africatel”). The Company provides services in
Mozambique, and São Tomé, among other countries, notably
through its subsidiaries Listas Telefónicas de Moçambique
(“LTM”) and CST – Companhia Santomense de
Telecomunicações, SARL (“CST”). Additionally,
Africatel holds an indirect 25% stake in Unitel S.A.
(“Unitel”) and a 40% stake in Cabo Verde Telecom, S.A.
(“CVT”), which provide telecommunications services in
Angola and Cape Verde.
In Asia, the Company provides fixed and mobile telecommunications
services basically through its subsidiary Timor Telecom.
The international operations referred to above are in the process
of being sold, as described in Note 26.
The Company is registered with the Brazilian Securities and
Exchange Commission (“CVM”) and the U.S. Securities and
Exchange Commission (“SEC”). Its shares are traded on
B3 S.A. – Brasil, Stock Exchange, OTC, and its American
Depositary Receipts (“ADRs”) representing Oi common
shares traded on the New York Stock Exchange
(“NYSE”).
JUDICIAL REORGANIZATION
The section Judicial Reorganization Plan should be read in
conjunction with the Company’s consolidated financial
statements and related footnotes for the year ended
December 31, 2017.
On January 8, 2018, the Judicial Reorganization Court issued a
decision that ratifies the JRP and grants the judicial
reorganization to the Oi Group, which was published on
February 5, 2018 (“JPR Ratification” or “JPR
Confirmation”). Under the terms of the JPR, some creditors
had until February 26, 2018 the option to elect the way their
credits would be restructured or paid, except for bondholders,
whose deadline was extended to March 8, 2018, as decided by
the Judicial Reorganization Court on February 26, 2018.
On April 10, 2018, PTIF and Oi Holanda filed with the Dutch
Court their composition plans—the terms of which are similar
to those of the JRP approved by the creditors at the
Creditor’ General Meeting on December 19 and 20, 2017
and ratified by the Judicial Reorganization Court in a court
decision issued on January 8, 2018, effective as from the
decision’s publication on the Official Gazette on
February 5, 2018 (“Composition Plan” or
“Composition Plans”)—and require setting dates
for the submission of claims and a vote on the Composition Plans,
which was granted by the Dutch Court on the same date, which set
May 17, 2018 as the deadline for the submission of claims and
June 1, 2018 to hold a vote on each Composition Plan as the
PTIF and Oi Holanda General Creditors’ Meeting.
On the same date, i.e., April 10, 2018, Oi released a Notice
to the Market informing about the decision above and the detailing
the consent solicitation to procedure to PTIF’s and Oi
Holanda’s noteholders for purposes of voting on their
Composition Plan to be granted by the noteholders of 6.25% Notes
issued by PTIF maturing in 2016 (ISIN No. PTPTCYOM0008)
(“PTIF Retail Notes”); 4.375% Notes issued by PTIF
maturing in March 2017 (ISIN No. XS0215828913); 5.242% Notes issued
by PTIF maturing in November 2017 (ISIN No. XS0441479804); 5.875%
Notes issued by PTIF maturing in 2018 (ISIN No. XS 0843939918);
5.00% Notes issued by PTIF maturing in 2019 (ISIN No.
XS0462994343); 4.625% Notes issued by PTIF maturing in 2020 (ISIN
No. XS0927581842); 4.50% Notes issued by PTIF maturing in 2025
(ISIN No. XS0221854200); 5.625% Senior Notes issued by Oi Holanda
maturing in 2021 (ISIN No. XS1245245045 e XS1245244402); and 5.75%
Senior Notes issued by Oi Holanda maturing in 2022 (CUSIP/ISIN No.
10553M AD3/US10553MAD39 and P18445 AG4/USP18445AG42) (collectively
“PTIF and Oi Holanda Notes”). In the case of PTIF, the
consent solicitation also aimed at releasing the guarantee provided
by Oi, as well as the authorization for Citicorp Trustee Limited
(as the Notes’ trustee) to vote the Oi Holanda’s
Composition Plan on behalf of the noteholders.
On April 17, 2018 the Chapter 15 Debtors filed with the United
States Bankruptcy Court a Full Force and Effect Motion”
(“FFE Motion”) in order for the JRP, as ratified by the
Brazilian courts, can be recognized and enforced in the U.S.
territory, which was granted on June 14, 2018 by the United
States Bankruptcy Court.
This decision, in addition to fully enforcing the effects and the
effectiveness of the JRP, as ratified, in the United States, it
also authorized the completion of any and all the stages required
for the implementation of the JRP, with regards to the following
series of debts governed by the New York law: (i) 9.75% of the
Senior Notes maturing in 2016 issued by Oi (CUSIP/ISIN 10553M
AC5/US10553MAC55 and P18445 AF6/USP18445AF68); (ii) 5.125% of the
Senior Notes maturing in 2017 issued by Oi (ISIN nº
XS0569301830 e XS0569301327); (iii) 9.50% das “Senior
Notes” maturing in 2019 issued by Oi (CUSIP/ISIN 87944L
AD1/US87944LAD10 P9037H AK9/USP9037HAK97); (iv) 5.50% of the Senior
Notes maturing in 2020 issued by Oi (CUSIP/ISIN 87944L
AE9/US87944LAE92, P9037H AL7/USP9037HAL70 and 87944L
AF6/USP87944LAF67); (v) 5.625% of the Senior Notes maturing in 2021
issued by Oi Coop (ISIN nº XS1245245045 e XS1245244402); and
(vi) 5.75% of the Senior Notes maturing in 2022 issued by Oi Coop
(CUSIP/ISIN 10553M AD3/US10553MAD39 and P18445
AG4/USP18445AG42).
On June 1, 2018, the holders of the PTIF and Oi Holanda Notes
approved the Composition Plans of PTIF and Oi Holanda.
On June 11, 2018, the Amsterdam District Court confirmed the
approval of the Composition Plans of PTIF and Oi Holanda
(“Confirmation Decision”). Since no appeal was lodged
and the Confirmation Decision became final, beginning June 20,
2018 the Composition Plans became effective inside The Netherlands
and, pursuant to the Dutch Law, PTIF and Oi Holanda are no longer
assigned a bankruptcy status.
Also on June 11, 2018, the Company disclosed a Notice to the
Market informing that the waiver of the conditions precedent to the
Capital Increase – New Funds set forth in items (ii) and
(iv.a) Appendix 4.3.3.5 (c) to the Plan was approved at the General
Creditors’ Meeting held on the same date, as provided for in
Clauses 4.3.3.5 (c) and 8.1 of the Plan.
On July 19, 2018, the preapproval for the completion of the
Capital Increase – New Funds, governed by Clause 6 of the
JRP, was requested to ANATEL, as required by Clause 16.1, XXI of
the Switched Fixed-line Telephony Services Concession Agreement
entered by the Company.
On July 20, 2018, the Board of Directors ratified in part the
Capital Increase – Claim Capitalization, approved at the
Board of Directors’ meeting held on March 5, 2018, after
verifying that the result of the new common shares’
subscription calculation by the Company’s shareholders by
exercising their preemptive right and the holders of the Qualified
Bondholders’ Unsecured Claims through the capitalization of
their related claims, as provided for by the JRP.
In the settlement procedure offered to the holders of the Qualified
Bondholders’ Unsecured Claims, which documented the
provisions of the JRP, such Qualified Bondholders decided for the
capitalization of claims equivalent to an aggregate of
R$10,600,097,221.00, equivalent to 1,514,299,603 new common shares,
at an issue price of R$7.00 per share, excluding common shares
representing fractions of American Depositary Shares
(“ADSs”), that were not issued. During the period for
Oi’s shareholders to exercise their preemptive rights, 68,263
common shares were subscribed, at the issue price of R$7.00,
totaling R$477,841.00.
The same Board of Directors’ meeting ratified the issue
subscription warrants as an additional gain to the subscribers of
the shares subject matter of the Capital Increase – Claim
Capitalization, and a total of 116,480,467 subscription warrants
were issued, with the delivery of 5,197 to the shareholders who
exercised their preemptive rights and the remaining Qualified
Bondholders.
Pursuant to Article 72 of the Bylaws then in effect and because of
a dilution of Company’s shareholding base in excess of 50% as
a result of the Capital Increase – Claim Capitalization, the
voting constraint therein was discontinued and immediately and
irrevocably ceased to have any effect with respect to the exercise
of voting rights by the Company’s shareholders.
The impacts arising from the initial recognition in the JRP terms
and conditions are presented in Note 2(e).
On July 27, 2018, with the end of the Qualified
Bondholders’ settlement procedure, the Company recognized the
additional accounting impacts of the transactions described above,
with the consequent reduction of profit for the period by
approximately R$31 million, the decrease in financial
liabilities by approximately R$21 million, and the decrease in
the capital reserve – Qualified Senior Notes mandatorily
convertible into shares and others by approximately
R$10 million.
On July 31, 2018, the Company released a Notice to the Market
informing that it had completed the restructuring of its financial
debt and the financial debt of the Companies under Reorganization
with the implementation of the applicable JRP terms and conditions
and the completion of the Capital Increase – Claim
Capitalization.
On August 1, 2018, the Company disclosed a Notice to the
Market informing that (i) it was aware of the decision issued
on July 30, 2018 by the Second Lisbon Commercial Court
(“Portuguese Court”), which denied the request made by
the Companies Under Reorganization for the recognition, in
Portugal, of the JRP Ratification by the Judicial Reorganization
Court. ; e (ii) it intends to file the proper appeal with the
Lisbon Appellate Court against the Portuguese Court’s
decision since it understands that this is not consistent with the
two decisions already issued by the same Court that acknowledge and
uphold in Portugal the request and the effectiveness of the
Companies Under Reorganization’s Judicial Reorganization in
Brazil, and since is it contrary to the decisions recently issued
by the United States Court and the Dutch Court. According to the
Portuguese Court, a final and unappealable decision on the JRP
Ratification would be necessary so it could be recognized in
Portugal. Note that the Portuguese Court’s decision was based
on formal aspects and it never mentions the merits of the JRP. That
decision has no impact on the validity and full effectiveness of
the JRP, the implementation of which was safeguarded by the
Judicial Reorganization Court.
On August 2, 2018, as provided for by the JRP, the Board of
Directors called its shareholders for The Company’s
Shareholders’ Meeting was held on September 17, 2018 and
the following decisions were made: (i) ratification of the
election of the Consensual Slate consisting of 11 independent
members and appointed by the Company’s management for the
composition of the New Board of Directors, pursuant to Clause 9.3
and sub-clauses
On October 1, 2018, by order of the Judicial Reorganization
Court, laid down in the decisions issued on August 20, 2018
(pages 341.970/341.973) and September 10, 2018 (Pages
344.335/344.340), the Companies under Reorganization initiated the
mediation procedure with creditors with pre-petition pre-petition
On October 3, 2018, the Company disclosed a Material Fact
Notice informing that, in compliance with Clause 4.3.3.6 of the
Plan and the provisions of Article 157, Par. 4, of Law 6404/1976
and in the form of CVM Instruction 358/2002, of October 26,
2018, the Company’s Board of Directors will meet to decide on
the Company’s capital increase through the private issue of
new common shares, amounting to R$4,000,000,000.00 (“Capital
Increase—New Funds”), as provided for by Section 6
of the Plan.
On October 4, 2018, the Company disclosed a Notice to the
Holders of American Depositary Warrants (“ADWs”),
complementing the information disclosed in the Material Fact Notice
dated October 3, 2018, regarding the start of the exercise
period of their ADWs, clarifying that (i) pursuant to the
Brazilian laws and regulations the exercise of the Subscription
Warrants that underlie the ADWs will be irrevocable and cannot be
withdrawn, and (ii) the exercise of the ADWs will be
irrevocable and cannot be withdrawn.
On October 11, 2018, the Company disclosed a Material Fact
Notice informing that it became aware that the Second Section of
the Brazilian Superior Court of Justice (“STJ”) ruled
on the conflict of jurisdiction injunction No. 157.099
requested by the Company due to conflicting decisions between the
Market Arbitration Chamber and the Judicial Reorganization Court
regarding the JRP. Under the terms of the vote given at the trial
session by Justice Nancy Andrighi, the majority vote decided that
discussions between the Company and its shareholders on the rights
provided for by the Corporate Law must be submitted to the
arbitration court of the Market Arbitration Chamber, without
prejudice to the preservation of the jurisdiction of the Judicial
Reorganization Court, which may or may not ratify the decisions of
the arbitration court. In this sense, the decisions handed down by
the Judicial Reorganization Court regarding the Plan approved and
maintained and the Plan remains unchanged. The decision made on
this date will be published by the Second Section of the STJ and is
subject to appeal.
On October 26, 2018, the Company became aware of the decision
rendered on October 25, 2018, by the Lisbon Appellate Court in
the connection with the Appeal brought by the Companies Undergoing
Reorganization, which reversed the decision rendered on
July 30, 2018 by the Portuguese Court recognized in Portugal
the Ratification decision of the JRP, and ordered the publication
this decision.
On the same date, the Board of Directors approved the Capital
Increase – New Funds, within the authorized capital ceiling
set in Oi’s Bylaws, through the issue of three billion, two
hundred twenty-five million, eight hundred six thousand, four
hundred fifty-one
Also on October 26, 2018, the Company became aware
(i) that the members of ANATEL’s Board of Directors
unanimously decided to grant a preapproval of the Capital Increase
– New Funds; and (ii) of the decision rendered by the
Support Arbitrator in the arbitration proceeding initiated against
the Company by shareholder Bratel S.À.R.L. in the Market
Arbitration Chamber, which suspended the effects of the approval of
the Capital Increase – New Funds, up to the next decision to
be rendered by the such Support Arbitrator. The Company clarifies
that such decision is provisional and can be changed, in whole or
in part, and that the Company will file arguments for the
reconsideration of the effects in which they represent damage to
the continuity of the undergoing Judicial Reorganization. The
Company believes that the implementation of Capital Increase
– New Funds is regular and that the decision does not affect
the validity of the Plan, which is maintained in all its terms.
Further, the Company will take the necessary actions to confirm its
understanding, especially regarding the jurisdiction limits of the
Arbitration Court.
Additionally, on the same date, as a continuation of the Material
Fact Notice disclosed on October 3, 2018, the Company
confirmed the issue of 112,598,610 common shares (“Common
Shares”) and the delivery of these Common Shares to the
holder of subscription warrants who had exercised their warrants by
October 24, 2018, including subscription warrants represented
by 22,135,429 American Depositary Warrants (“ADWs”)
exercised by October 18, 2018. The Company expects that the
American Depositary Receipts, each representing five
(5) common shares (CUSIP: 670851500; ISIN: US6708515001), will
be delivered by October 29, 2018 to the holders that exercise
their ADWs by October 18, 2018.
On November 6, 2018, the Company disclosed a Material Fact
Notice informing that it became aware of the decision issued by the
Supporting Arbitrator of the arbitration proceeding filed by
shareholder Bratel S.À.R.L. against the Company with the
Market Arbitration Chamber, which reconsidered its previous
decision issued on October 26, 2018 that suspended the effects
of the capital increase’s approval through the private
placement of new common shares approved by the Company’s
Board of Directors at the meeting held on October 26, 2018, as
provided for by Clause 6 of the Plan, and authorizing the Company
to take the necessary actions to complete the Capital Increase
– New Funds.
Updates occurred in 2018 of the payment proposals in the JRP
approved at the CGM on December 20, 2017 and ratified by the
Judicial Reorganization Court on January 8, 2018
On June 13, 2018, ANATEL agreed with the restructuring of the
qualified bonds, in Decision No. 336/2018, authorizing the
stages necessary for the capital increase of the other actions
required for complying with Clause 4.3.3.2 of the JRP.
Specifically, the authorized conversion entailed the issue of new
shares, the dilution of the current shareholders’ interests,
the capital increase, and the change of the Company’s current
shareholding structure. ANATEL ratified the determination of any
change in the Company’s Board of Directors that must be
previously submitted to the Regulator’s review.
On June 18, 2018, the Superintendent General of the
Administrative Economic Defense Council (“CADE”)
(Brazilian antitrust authority) decided, under SG Order
No. 753/2018, not to acknowledge the qualified bonds’
restructuring transaction, which had been cautiously notified to
said authority exclusively to ensure the compliance with JRP within
the prescribed deadlines. According to the CADE Superintendent
General, the transaction was not acknowledged because it did not
meet the revenue requirement prescribed by Law 12529/2011. No
complaints were filed against this decision.
With the confirmation of the CADE’s decision and taking into
account ANATEL’s Steering Board’s decision that granted
the preapproval requested by the Company to complete the capital
increase provided for by Clause 4.3.3.2 of the JRP, all the
conditions precedent listed by the Plan to undertake said capital
increase for completion of the corporate documentation required to
undertake said capital increase were either verified or waived,
considering that the related conversion of debt into equity
instruments was implemented after the ratification of the JRP, on
February 5, 2018.
Capital Increase – New Funds
Pursuant to the shareholders’ preemptive right and fulfilling
or waiving the conditions precedent provided for in the Backstop
Agreement or the JRP, the Company is required to make a Capital
Increase – New Funds totaling R$4,000,000,000.
The Issue Price of the New II Common Shares shall be calculated by
dividing R$3,000,000,000 by the number of Oi shares outstanding on
the business day immediately prior to the capital increase, taking
into consideration possible adjustments provided for in the
Backstop Agreement.
Taking into consideration the terms and conditions of the Backstop
Agreement, a commitment fee of 8% in US dollars or 10% in Company
common shares shall be due to the investors identified in the
Backstop Agreement that commit to promptly provide or obtain firm
commitments for the full subscription of the capital increase, as
established in said Backstop Agreement. Certain aspects related to
the Backstop Agreement can be changed as a result of the decision
that ratified the judicial reorganization plan, against which
motions for clarification were filed, notably because the size of
the commitment premium of the other similar creditors that are
subject to the same conditions of the investors who are identified
in the Backstop Agreement has been determined.
Conditions Precedent
The JRP, in Appendix to Clause 4.3.3.5, provides for a set of
resolution and suspensory conditions precedent that need to be
checked or formally and expressly waived by the qualified unsecured
creditors until the actual conversion of the claims in Company
securities. As at September 30, 2018 Management was not aware
of any events of noncompliance with these conditions.
Liabilities subject to compromise (Note 28)
As a result of the filing of the Bankruptcy Petitions, the company
has applied the FASB Accounting Standards Codification
(“ASC”) 852 Reorganizations
Certain amounts initially recorded as liabilities subject to
compromise were adjusted and reclassified to reflect the new legal
terms and conditions established by the JRP Court.
In connection with an emergence from the Judicial Reorganization
Cases, the Company expects to adopt fresh start accounting, upon
which the Company’s assets and liabilities will be recorded
at their fair value. The fair values of the Company’s assets
and liabilities as of that date may differ from the recorded values
of its assets and liabilities as reflected in its historical
consolidated financial statements. In addition, the Company’s
adoption of fresh start accounting may affect its results of
operations following the fresh start reporting dates as the Company
may have a new basis in its assets and liabilities. Consequently,
the Company’s financial statements may not be comparable with
the financial statements prior to that date and the historical
financial statements may not be reliable indicators of its
financial condition and results of operations for any period after
it adopts fresh start accounting. On September 30, 2019, the
Company did not emerge from bankruptcy, due to certain material
unsatisfied conditions, which relates to additional capital
increase which occurred on January 25, 2019. | 1. BASIS OF
PRESENTATION
Oi S.A. - Under Judicial Reorganization – Debtor-in-Possession
The Company is headquartered in Brazil, in the city of Rio de
Janeiro, at Rua do Lavradio, 71 – 2º andar.
The Company also holds: (i) through its wholly-owned
subsidiary Telemar Norte Leste S.A. - Under Judicial Reorganization
– Debtor-in-Possession Debtor-in-Possession
The local and nationwide STFC long-distance concession agreements
entered into by the Company and its subsidiary Telemar with ANATEL
are effective until December 31, 2025. These concession
agreements provide for reviews on a five-year basis and in general
have a higher degree of intervention in the management of the
business than the licenses to provide private services, and also
include several consumer protection provisions, as perceived by the
regulator. On December 30, 2015, ANATEL announced that the
review to be implemented by the end of 2015 had been postponed to
April 30, 2016. Subsequently, On April 29, 2016, ANATEL
decided, under a Resolution Circular Letter, to postpone until
December 31, 2016 the execution of the revised
agreements. On December 30, 2016 and under a Resolution
Circular Letter, ANATEL postponed again the execution of the new
concession agreements up to June 30, 2017. On June 29,
2017, ANATEL informed, in an official letter, that it would no
longer make any further amendments to the concession agreements at
this instance. Note that until the end of the concession agreement
on December 31, 2025 there would still be a period for
revision, on December 31, 2020. It is worth noting that
Congress Bill 79/2016 provides for a special amendment of
concession agreements to adjust them to the possibility of
migrating from a public utility regime to an STFC service provision
under a private law regime. Thus, if this bill is passed into law,
the concession agreement is subject to amendment in any date other
than December 31, 2020. Throughout the years, ANATEL initiated
some procedures aiming at monitoring the Company’s financial
situation, as well as to assess the Company’s ability to
discharge its obligations arising from the terms of the concession
agreements. In light of the approval of the Judicial Reorganization
Plan by the creditors and its subsequent ratification by the
competent court ANATEL started to monitor the Oi Group
Companies’ operating and financial positions based on the
effectiveness of said Judicial Reorganization Plan (JRP).
In Africa, the Company provides fixed and mobile telecommunications
services indirectly through Africatel Holding BV
(“Africatel”). The Company provides services in
Mozambique, and São Tomé, among other countries, notably
through its subsidiaries Listas Telefónicas de Moçambique
(“LTM”) and CST – Companhia Santomense de
Telecomunicações, SARL (“CST”). Additionally,
Africatel holds an indirect 25% stake in Unitel S.A.
(“Unitel”) and a 40% stake in Cabo Verde Telecom, S.A.
(“CVT”), which provides telecommunications services in
Angola and Cape Verde.
In Asia, the Company provides fixed and mobile telecommunications
services basically through its subsidiary Timor Telecom.
The Company is registered with the Brazilian Securities and
Exchange Commission (“CVM”) and the U.S. Securities and
Exchange Commission (“SEC”). Its shares are traded on
B3 S.A. – Brasil, Stock Exchange, OTC, and its American
Depositary Receipts (“ADRs”) representing Oi common
shares and preferred shares traded on the New York Stock Exchange
(“NYSE”).
JUDICIAL REORGANIZATION
On June 20, 2016, Oi, together with its direct and indirect
wholly owned subsidiaries Oi Móvel, Telemar, Copart 4
Participações S.A. – Under Judicial Reorganization
- Debtor-in-Possession Debtor-in-Possession Debtor-in-Possession Reorganization—Debtor-in-Possession
As broadly disclosed to the market, the Company had been taking
actions and conducting studies, together with its financial and
legal advisors to optimize its liquidity and debt profile. The
Company, after considering the challenges arising from its
economical and financial situation and in light of the maturity
schedule of its financial debts, threats to cash flows represented
by imminent block or pledge of amounts in lawsuits, and in light of
the urgency to adopt protection measures of the Oi Companies,
concluded that the request for judicial reorganization was the most
appropriate course of action at that time to (i) preserve the
continuity of its offering of quality services to its customers,
within the rules and commitments undertaken with the Brazilian
National Telecommunications Agency (ANATEL), (ii) preserve the
value of the Oi Companies, (iii) maintain the continuity of
operations and corporate activities in an organized manner, thus
protecting the interests of the Oi Companies, its customers,
shareholders and other stakeholders, and (iv) protect the Oi
Companies’ cash and cash equivalents.
The filing of the judicial reorganization was another step towards
the Company’s financial restructuring, who continues working
to secure new customers while maintaining its service and product
sales to all market segments, in all of its distribution and
customer service channels. The installation, maintenance and repair
activities also continue to be performed on a timely basis by the
Oi Companies and their subsidiaries. All of Company’s
workforce has been maintaining the work as usual, including sales,
operating and administrative activities. Oi keeps focusing on its
investments in structuring projects aimed at promoting the
improvement of service quality to continue to bringing
technological advances, high service standards, and innovation to
its customers.
On June 22, 2016, the United States Bankruptcy Court for the
Southern District of New York (“U.S. Bankruptcy Court”)
entered an order granting the provisional relief requested by the
Company, Telemar, Oi Holanda and Oi Móvel (all four
collectively referred to as “Debtors”) in their United
States bankruptcy code Chapter 15 cases that were filed on
June 21, 2016.
The Provisional Relief prevents creditors from initiating actions
against the Debtors or their property located within the
territorial jurisdiction of the United States and parties from
terminating their existing U.S. contracts with the Debtors.
On June 23, 2016, the High Court of Justice of England and
Wales issued orders recognizing the judicial reorganization request
in respect of the Company, Telemar and Oi Móvel filed in
Brazil pursuant to Law 11101/2005, as a foreign main proceeding in
accordance with the United Nations Commission on International
Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency, as set
out in Schedule 1 to the Cross-Border Insolvency Regulations 2006
(S.I. 2006 No. 1030) (“Recognition Orders”).
The Recognition Orders establish that the commencement or
continuation of proceedings (including enforcement actions) in
England and Wales relating to the Company’s, Telemar’s
and Oi Móvel’s assets, rights, obligations or
liabilities are stayed from June 23, 2016.
On June 29, 2016, the Judge of the 7 th
The decision granting the processing of the judicial reorganization
of the Oi Companies determined that all the procedural time limits
are counted in business days. To this regard, even though the
decision has determined that the Judicial Reorganization Plan
(“JRP” or “Plan”) be filed within 60
business days, the Public Prosecution Service filed an
interlocutory appeal requesting that this time limit be counted in
calendar days. In light of the interlocutory appeal filed by the
Public Prosecution Service, the Judicial Reorganization Court
revised its decision, establishing that the JRP be filed within 60
calendar days, counted from the issuance of the decision granting
the processing of the judicial reorganization.
On July 21, 2016, the U.S. Bankruptcy Court held a hearing to
judge the Debtors’ requests and since no objection to the
recognition was filed, the U.S. Bankruptcy Court recognized the
judicial reorganization as a main foreign proceeding with regard to
each of the Debtors. As a result of this recognition, a stay was
automatically applied, preventing the filing, in the United States,
of any actions against the Debtors or their properties located
within the territorial jurisdiction of the United States and
parties from terminating their existing U.S. contracts with the
Debtors.
On July 22, 2016, the judicial reorganization request was
ratified by the shareholders at the Company’s Extraordinary
Shareholders’ Meeting.
The shareholders also authorized the Company’s management to
take all the actions and practice all the acts necessary with
regard to the judicial reorganization of the Oi Companies and
ratified all the actions taken up to that date.
On July 22, 2016, the Judicial Reorganization Court appointed
PricewaterhouseCoopers Assessoria Empresarial Ltda. as the
court-appointed financial administrator, and the law firm Arnoldo
Wald to act as the court-appointed legal administrator
(collectively, “Judicial Administrator”) of the Oi
Companies.
Considering that the Judicial Reorganization Court changed the way
the deadline to file the plan is counted, as referred to above, on
September 5, 2016 the Oi Companies filed the JRP, which
establishes the terms and conditions for the restructuring of the
Oi Companies’ debt, and the main actions that could be
adopted to overcome the current financial situation of the Oi
Companies and their continuity as going concerns, including by
(i) restructuring and balancing their liabilities;
(ii) prospecting and adopting actions during the judicial
reorganization aiming to obtain new funds; and (iii) potential
sale of capital assets.
The first list of creditors submitted by the Oi Companies was
published on September 20, 2016 (“First List of
Creditors”). Payables to parties not controlled by Oi,
according to the First List of Creditors, totaled approximately
R$65.1 billion. As from the date of this publication, the
creditors had fifteen (15) business days to file with the
Judicial Administrator (i) a proof of claim (the “Proof
of Claim” or “Claim”), if their receivables were
not included in the First List of Creditors, or (ii) the
discrepancy (the “Discrepancy”) if, according to the
creditor, the amount in the First List of Creditors is incorrect or
its credits were incorrectly classified. The deadline for creditors
to file a Claim and/or a Discrepancy was October 11, 2016.
On March 2, 2017, the 3 rd
On March 22, 2017, the Company’s Board of Directors
approved the basic financial conditions to be adjusted in the JRP
and authorized the Company’s Executive Officers and advisors
to file, as soon as possible, an amendment to the JRP with the
Judicial Reorganization Court, as disclosed by Oi in a Material
Fact Notice on the same date, and these conditions were presented
in court on March 28, 2017. The amended JRP was filed with the
court on October 11, 2017.
On March 31, 2017, the Judicial Reorganization Court issued a
decision replacing PricewaterhouseCoopers Assessoria Empresarial
Ltda. as financial administrator for the BDOPro Consortium, which
declined the appointment. Thus on April 10, 2017, the law Firm
Arnoldo Wald was appointed as the sole judicial administrator of
the Oi Companies’ Judicial Reorganization.
The judicial administrator reviewed the First List of Creditors and
after reviewing this List, taking into consideration the Claims and
Discrepancies, submitted the list of creditors published in the
Notice of May 29, 2017 (“List of Creditors”).
The publication of the List of Creditors set two deadlines for the
creditors: (i) a ten-business
On August 23, 2017, the Judicial Reorganization Court
scheduled the date of the first Creditors’ General Meeting
(“CGM”) for October 9, 2017 (on its first notice
to convene) and October 23, 2017 (on its second notice to
convene).
On September 27, 2017, in light of the negotiated decisions to
ensure the approval of the JRP and the procedural aspects related
to holding the General Creditors’ Meeting
(“CGM”), which could result in changes in the voting
system, the Oi Companies requested to the Judicial Reorganization
Court the postponement of the CGM to October 23, 2017, on its
first notice to convene, and November 27, 2017, on its second
notice to convene, at Riocentro. The Judicial Reorganization Court
approved this request on the same day, seconding the favorable
opinions of the judicial administrator and the Rio de Janeiro
State’s Public Prosecution Office.
On October 10, 2017, the majority of the members of the
Company’s Board of Directors approved the new version of the
JRP.
On October 11, 2017, the RJ Debtors filed a new, joint version
of the JRP with the Judicial Reorganization Court, to be reviewed
and approved at the CGM on the dates referred to above, as well as
the report of the independent appraiser.
On October 20, 2017, in response to the requests made by
certain creditors, the Judicial Reorganization Court determined the
postponement of the GCM for November 6, 2017, on its first
notice to convene, and November 27, 2017, on its second notice
to convene.
In compliance with the provisions of Article 36 of Law 11101/2005,
the Judicial Reorganization Court, in response to a request from
the Judicial Administrator, determined the postponement of the CGM
date, firstly scheduled for November 6, 2017, on its first
notice to convene, for November 10, 2017, and maintained
November 27, 2017 to hold the CGM, on its second notice to
convene.
On November 9, 2017, in response to the new requests made by
certain creditors, the Judicial Reorganization Court determined
once again the postponement of the CGM to December 7, 2017, on
its first notice to convene, which may continue on December 8,
2017, if necessary, and February 1, 2018, on its second notice
to convene, which may continue on February 2, 2018, if
necessary.
Again, on November 29, 2017, the Judicial Reorganization Court
determined once again the postponement of the CGM to
December 19, 2017, on its first notice to convene, which may
continue on December 20, 2017, if necessary, and
February 1, 2018, on its second notice to convene, which may
continue on February 2, 2018, if necessary.
On December 19, 2017, after confirming that the required
quorum of classes I, II, III, and IV creditors was in attendance,
the CGM was held and the JRP was approved by a vast majority of
creditors on December 20, 2017.
On January 8, 2018, the Judicial Reorganization Court issued a
decision that ratifies the JRP and grants the judicial
reorganization to the Oi Companies. Said decision was published on
February 5, 2018, initiating the period for the creditors of
the RJ Debtors to elect one of the payment options to recover their
claims, as provided for in the JRP, which ended on
February 26, 2018, except for bondholders, whose deadline was
extended to March 8, 2018, as decided by the Judicial
Reorganization Court on February 26, 2018.
In the course of the preparation of the JRP, the Company assessed a
significant set of scenarios and forecasts for the evolution of its
operations and financial, and conducted discussions with creditors
and partners affected by the JRP. This preparatory work was in line
with the complexity and sheer size of the Company’s business,
the existing high number of operating and financial processes and
controls with an impact on the assumptions used by Management, and
the volume and diversity of the information used.
The Company’s management identified, during the preparation
of the JRP, that there were weaknesses in some of these processes
and controls and an opportunity to obtain further information from
the entities involved in the process.
In light of the identification of weaknesses in controls, the
Company’s management immediately took the necessary actions
to measure possible impacts of the JRP on cash flows and the
Company’s historic financial statements, namely with regard
to the realizable value of assets. In a short period of time,
Management initiated the procedures aimed at identifying the root
cause of the weaknesses, the design, and the implementation, within
a short and, appropriate time horizon, of new and improved
controls. Finally, this work allowed Management to conclude that
there should not be any impact on the Judicial Reorganization
Plan’s Cash Flows and make the corresponding corrections of
accounting errors (Note 2).
The prepetition liabilities subjected to compromise will be
recovered by the creditors in accordance with the JRP approved at
the CGM on December 19 and 20, 2017 and ratified by the
Judicial Administrator Court on January 8, 2018, which was
submitted on December 22, 2017 by the Trustee, in the records
of digital case No. 0203711-65.2016.8.19.0001,
Creditors Settlement Program
On June 23, 2017, the Company disclosed a Notice to the Market
informing that, as authorized by the Judicial Reorganization Court,
the Company was going to initiate a program to enter into
settlements with the Oi Companies’ creditors listed in the
Judicial Administrator’s List of Creditors, published on
May 29, 2017 (“Oi Creditor” and “Creditors
Settlement Program” or “Program”, respectively),
and creditors could join the program via the website
www.credor.oi.com.br
The Creditors Settlement Program was applicable for creditors with
claims amounting to R$50,000 or lower, and allowed the prepayment
of 90% of the claim on the acceptance of the creditor and the
remaining 10% of the claim after the approval of the JRP, to be
paid under the terms and conditions of the Creditors Settlement
Program. A Oi Creditor whose claim was higher than R$50,000 would
be entitled to join the Creditors Settlement Program, in which case
they would receive a R$50,000 prepayment, upon acceptance by such
Oi Creditor of the settlement under the terms and conditions set
out in the Creditors Settlement Program and the exceeding amount
will be paid as set out in the Plan. The Creditors Settlement
Program benefited the participating Oi Creditors as it allowed for
the prepayment of part of the amount under the Program.
The Program was temporarily suspended by force of a judicial
decision but on August 29, 2017 the Rio de Janeiro State Court
of Justice overturned this decision and upheld the validity of the
Creditors Settlement Program. Accordingly, the Creditors Settlement
Program was implemented as from this date, and ended in
December 8, 2017.
Approximately 35,000 creditors jointed the Creditors Settlement
Program, of which about 30,000 in Brazil and 5,000 in Portugal, and
approximately R$360 million were made available for the
prepayment of the settlements entered into under the Program.
Pre-petition
The Company has reported that it has knowledge of regulatory
punitive administrative proceedings and lawsuits that could amount
to approximately R$14.5 billion as at June 30, 2016,
including fines imposed, expected fines to be imposed and
corresponding inflation adjustments. The Company disagrees and is
challenging a material portion of the noncompliance events pointed
out by ANATEL and it is also challenging the disproportionateness
of the punitive actions taken, emphasizing their
unreasonableness.
It is worth noting that in the context of the judicial
reorganization of the Oi Companies, ANATEL challenged, amongst
others, the decision that approved the processing of the judicial
reorganization, as well as the beginning of a mediation proceeding
between the RJ Debtors and itself, by filing bills of review
No. 0043065-84.2016.8.19.0000 No. 0060963-13.2016.8.19.0000. No. 0043065-84.2016.8.19.0000, th
It is worth noting that ANATEL also challenged the submission of
its claims to the judicial reorganization proceeding, by filing
interlocutory appeal No. 0057446-63.2017.8.19.0000 pre-petition th
In addition to the appeals referred to above, ANATEL filed
interlocutory appeal No. 0048971-21.2017.8.19.0000 th Sub-clauses pre-petition pre-petition th
ANATEL also filed interlocutory appeal No. 0055283-13.2017.8.19.0000 th
The JRP submitted to and approved at the CGM on December 20, 2017,
which was ratified by the Judicial Reorganization Court on
January 8, 2018, lays down the payment method Pre-petition non-tax
(i)
Payment of nontax pre-petition st th st th st th st th th
Because the other nontax pre-petition
The Plan also provides for the possibility of the Company adopting
a general statutory rule to be published in the future in order to
regulate the non-tax
Note, however, that ANATEL filed interlocutory appeal No. 001068-32.2018.8.19.0000
Accordingly, the court decisions in effect establish that
ANATEL’s non-tax Pre-petition
Payment proposals in the JRP approved at the CGM on
December 20, 2017 and ratified by the Judicial Reorganization
Court on January 8, 2018
The Oi Group’s creditors shall become creditors of the
debt(s) issued by the RJ Debtor that was their original debtor.
Plan for Creditors (Note 28)
This section presents a summarized version of the key terms of the
repayment Plan to Oi Group Creditors, including certain information
on the financial terms and conditions included in the JRP.
Note that, as defined in Appendix 1.1 to the JRP, the publication
date of the Judicial Reorganization Court’s decision
ratifying the JRP, i.e., the lower court decision granting the
judicial reorganization, against which no appeal with a suspensory
effect is upheld, which is January 8, 2018, published on the
Official Gazette on February 5, 2018, is taken into
consideration for purposes of the way the time limit in the payment
terms is counted.
Class I – Labor Claims
The payment of Labor Claims is described below:
General rule: labor claims shall be paid in five (5) equal
monthly installments, with a 180-day six-month
Labor Claims that are collateralized by judicial deposits:
•
Shall be paid through the immediate withdrawal of the
amount deposited in court.
•
If the deposited amount is lower than the debt listed
by the Oi Companies, the deposit shall be used to pay part of the
debt and the outstanding balance shall be paid after a decision is
issued by the Court that ratifies the amount due in five
(5) equal monthly installments, with a 180-day
Labor Claims not collateralized by judicial deposits shall be paid
via judicial deposits attached to the court records of the related
case.
Fundação Atlântico (pension fund) claims:
•
Payable in six (6) annual, equal installments,
with a five-year grace period as from the Court Ratification of the
Plan.
•
Interest/inflation adjustment: five-year grace period
for interest. National Consumer Price Index (INPC) + 5.5% per year,
levied as from the Court Ratification of the Plan, annually accrued
during the grace period and payable annually, as from the sixth
year, together with the principal installments.
Class II – Collateralized Payables
Class 2 claims shall be paid as follows:
Each creditor shall receive the original debt amount, as disclosed
in the List of Creditors, adjusted by the interest/inflation
adjustment rate, as follows:
Principal shall be repaid as follows:
•
72-month
•
Principal shall be repaid in 108 monthly installments,
as described in the table below:
Months
Percentage of the amount to be repaid per month
0 a 72 nd 0.0%
73 rd nd 0.33%
133 rd th 1.67%
180 th 1.71%
•
Four-year grace period on interest.
Interest: Long-term Interest Rate, released by the Central Bank,
plus spread of 2.946372%, where the interest levied in the first
four (4) years shall not be paid and shall be accrued annually
and added to the principal.
Classes III and IV – Unsecured Creditors and
MBOs/SBs
The payment proposal for claims of Unsecured Creditors and
Micro-business Owners (“MBOs”) and Small Businesses
(“SBs”) is described below, according to the thresholds
established in the JRP:
Linear payment to Unsecured Creditors:
•
Linear payment to Unsecured Creditors: Unsecured
Creditors’ and MEs/EPPs’ claims of amounting up to
R$1,000 were paid in a single installment within 20 business days
after the Court Ratification of the Plan.
•
Unsecured Creditors and MEs/EPPs with claims above
R$1,000 can elect to receive their claims in a single installment,
providing that they agree to receive only R$1,000 as the full
payment of their claims an related costs, payable within 20
business days after the end of the period to elect the payment
option.
Unsecured Creditors with Judicial Deposits:
Claim Amount Interval
Discount %
Up to R$1,000.00 0%
R$1,000.01 to R$5,000.00 15%
R$5,000.01 to R$10,000.00 20%
R$10,000.01 to R$150,000.00 30%
Over R$150,000.00 50%
•
Shall be paid through the withdrawal of the deposited
amount;
•
If the deposit is lower than the debt (after the
discount above, as applicable), the deposit shall be used to pay
part of the debt and the outstanding balance shall be paid after a
decision issued by the competent court that ratifies the amount due
according to the General Payment Method described below;
•
If the deposit is higher than the debt (calculated
after the discount above, as applicable), The Oi Companies shall
withdraw the difference.
Unsecured Creditors and MEs/EPPs that are not paid as provided for
above can opt for payments using one of the method described below,
limited to a maximum amount per offer.
Restructuring Option 1:
•
Part of Classes 3 and 4 claims shall be denominated in
Brazilian reais by the amount of Classes 3 and 4 Creditors that
elected this option, up to a ceiling of R$10,000,000,000; these
Creditors can elect one of the following methods: (i) claim
restructuring; (ii) private debentures, or (iii) public
debentures.
•
Part of Classes 3 and 4 claims shall be denominated in
US dollars by the amount claimed of Classes 3 and 4 Creditors that
elected this option, up to a maximum of US$1,150,000,000.
•
60-month
•
Principal shall be repaid in 24 semiannual, successive
installments, as shown in the table below:
Six-month
Percentage of the amount to be repaid
per six-month
0 to 10 th 0.0%
11 th th 2.0%
21 st rd 5.7%
34 th 5.9%
•
The interest rate shall be (i) an annual rate
equivalent to 80% of the interbank deposit rate (CDI) for
claims denominated in Brazilian reais and (ii) 1.75% per year for
claims denominated in US dollars; interest shall be annually
accrued to the principal and paid semiannually as from the
66 th
•
Once this offer’s maximum amounts are reached,
the outstanding balances of the claims payable under this offer
shall be paid according to the General Payment Method described
below.
Restructuring Option 2:
•
The claims of the Creditors that elect this payment
method shall be restructured in US dollars within up to six
(6) months after the Court Ratification of the Plan, limited
to a maximum of US$850,000,000.
•
60-month
•
Principal shall be repaid in 24 semiannual, successive
installments, as shown in the table below:
Six-month
Percentage of the amount to be repaid
per six-month
0 to 10 th 0.0%
11 th th 2.0%
21 st rd 5.7%
34 th 5.9%
•
Interest of 1.25% per year, annually accrued to the
principal and paid semiannually as from the 66th month after the
Ratification of the Judicial Reorganization Plan, where:
•
During the principal grace period, 10% of total
interest shall be paid semiannually, while the remaining 90% shall
be accrued to the principal annually. After this period, 100% of
total interest shall be paid semiannually.
•
Once this offer’s maximum amounts are reached,
the outstanding balances of the claims payable under this offer
shall be paid according to the General Payment Method described
below.
•
The creditors’ rights granted under this offer
can only be assigned with the prior consent of Oi.
Bond restructuring Option 3:
Restructuring of unqualified bonds:
•
This offer is available only to bondholders with
claims up to US$750,000, and it is limited to a maximum of
US$500,000,000.
•
50% discounts, firstly applied to interest and
subsequently to principal.
•
Grace period on principal: six years as from the
Ratification of the Plan.
•
Principal shall be equivalent to 50% of the
unqualified bondholders’ claims, capped at US$250,000,000,
and shall be repaid in twelve (12) semiannual, successive
installments, as shown in the table below:
Six-month
percentage of the amount to be repaid
per six-month
0 to 12 th 0.0%
13 th th 4.0%
19 th rd 12.66%
24 th 12.70%
•
Interest: 6% per year in US dollars, annually accrued
to the principal as from the 78 th
Restructuring of qualified bonds:
•
This offer is available only to bondholders with
claims in excess of US$750,000, which will receive the
following:
•
Common shares issued by Oi and currently held by
PTIF;
•
New notes;
•
New I Common Shares; and
•
Subscription Warrants
•
Exchange ratios: for each US$664,573.98:
•
9,137 common shares issued by Oi and currently held by
PTIF;
•
New Notes, issued at the overall price of US$145,262,
which consists of a par value of US$130,000 and an issue premium of
US$15,262;
•
119,017 New I Common Shares;
•
9,155 Subscription Warrants.
Note: the exchange ratios assume that the number of Oi common
shares and Oi preferred shares is 825,760,902.
•
The New Notes shall be issued in US$1,000 multiples
and shall have a maximum par value of R$6,300,000,000, equivalent
to a maximum par value of US$1,918,100,167.
•
Maturity: 7 th
•
Principal: shall be repaid in a bullet payment
maturing on the 84 th
•
Interest: can be paid under one of the following two
methods:
•
10% per year, paid semiannually; or
•
During the first three (3) years as from the
plan’s ratification, 12% interest paid semiannually, of which
8% of the annual interest paid is in cash semiannually and 4%
compounded semiannually and paid in the 36 th th
•
The New I Common Shares shall be due as a result of
the capital increase, through the capitalization of the claims:
•
Up to 1,756,054,163 New I Common Shares shall be
issued with par value ranging from R$6.70 to R$7 to a total ranging
from R$11,756,562,892.10 to R$12,292,379,141.
•
Subscription warrants: Oi shall issue up to
135,081,089 subscription warrants.
Restructuring Option 4: General Payment Method
This offer applies to creditors that do not meet the terms and
conditions of the previous offers or if the offers highlighted
above exceed their maximum amounts and the creditor still holds an
outstanding balance.
•
Principal shall be repaid in five (5) equal
annual, successive installments after the 20-year
•
Interest/inflation adjustment:
•
Interest equivalent to TR, a benchmark rate, per year
in the case of unsecure claims whose holders elect to receive
payment for their claims in Brazilian reais; this interest shall be
levied as from the Court Ratification of the Plan, and total
interest and inflation adjustment accrued in the period shall be
paid only and together with the last principal installment.
•
No interest, in the case of unsecured claims whose
holders elect to receive payment for their claims in US
dollars.
•
The Company shall have an early repayment option
consisting of the payment of 15% of principal and accrued
interest.
•
Payment maximum: R$70,000,000,000, minus the amount of
pre-petition
Restructuring Option 5: Strategic Supplier Creditors
•
The claims of Strategic Supplier Creditors, suppliers
of goods and/or services that kept the terms and conditions
practiced prior to the filing of the Judicial Reorganization Plan,
that do not arise from loans or financing facilities granted to the
Oi Companies, shall be paid, up to a maximum of R$150,000, within
up to 20 business days after the end of the period to elect the
payment option.
If these suppliers have claims in excess of R$150,000, they shall
receive the outstanding amount minus a 10% discount in four
(4) equal annual, successive installments, plus (i) TR +
0.5% in the case of real-denominated claims and (ii) 0.5% per year
in the case of US dollar- or euro-denominated claims.
Claims of related parties
Claims that refer to intragroup loans among the RJ Debtors, by
using cash generated by transactions conducted in the international
market by the RJ Debtors, shall be paid as described below:
•
Principal shall be repaid beginning on the
20 th
•
Interest/inflation adjustment: TR for real-denominated
intragroup claims 0.5%, levied as from the Court Ratification of
the Plan. Total interest and inflation adjustment accrued in the
period shall be paid only and together with the last principal
installment. No interest, in the case of dollar- or
euro-denominated intragroup claims.
The Oi Companies may mutually agree an alternative method for the
settlement of intragroup claims, under the originally agreed terms
and conditions, including, but not limited to, by netting their
payables and receivables, as provided for by the law.
Cash Sweep
Unsecured Creditors, MEs/EPPs, and Secured Creditors can acc |
