Brazil's Oi Starts Talks to Restructure Debts

   By Rogerio Jelmayer 
 

SAO PAULO--Debt-laden Brazilian telecommunication company Oi SA is starting talks with certain creditors in order to restructure its debt.

"Oi has entered into a customary nondisclosure agreement with Moelis & Company, who acts as adviser for a diverse ad hoc group of holders of the bonds issued by Oi and certain of its affiliated companies," Oi said in a statement Monday.

"The company views entry into the nondisclosure agreement with this bondholder adviser as an initial step toward productive and expeditious discussions regarding the terms of a potential restructuring," it added.

In March, Oi hired hired U.S.-based PJT Partners Inc. as a financial adviser, weeks after a planned capital injection was called off.

In February, an investment firm's planned $4 billion capital injection into the Brazilian company fell apart. The plan by LetterOne, or L1, led by Russian billionaire Mikhail Fridman, had been contingent on a planned tie-up of Oi and local mobile-phone company TIM Participacoes SA, which was rejected by the latter company's parent, Telecom Italia SpA.

LetterOne's planned capital injection had been intended to help finance the merger deal and also would have helped aided Oi in its efforts to reduce its debt, according to analysts.

Oi's net debt totaled 38.15 billion reais ($10.8 billion) at the end of fourth quarter--the most recent figures available--while the company's earnings before interest, taxes, depreciation and amortization, or Ebitda, amounted to BRL1.7 billion. More than 80% of company's debt is denominated in U.S. dollars.

Write to Rogerio Jelmayer at [e-mail]

(END) Dow Jones Newswires

April 25, 2016 08:58 ET (12:58 GMT)

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