August 1, 2018 / 3:03 PM / 3 months ago

UPDATE 1-Oi say Portuguese judge declines to recognize restructure plan

(Adds details on decision, adds context)

SAO PAULO, Aug 1 (Reuters) - Brazilian telephone carrier Oi SA said on Wednesday that a judge in Lisbon had decided against validating the company’s restructuring plan in Portugal for now, adding that the decision will not keep the plan from going into effect.

In a securities filing, Oi said a judge determined that there are outstanding appeals related to the firm’s restructuring of 65 billion reais ($17.4 billion) in debt that must be resolved before the Portuguese court signs off on the plan.

Oi added that the decision was rooted in formalities, not on the merits of the restructuring plan, which was approved by the company’s creditors in December. The firm also said it would appeal the decision.

“Oi reiterates that the decision does not impact the solidity or efficacy of the (restructuring) plan, whose execution was preserved by the bankruptcy judge,” the company said.

Creditors in Oi, Brazil’s largest fixed line carrier, approved the restructuring plan in December, turning U.S. hedge funds such as Goldentree Asset Management LP and York Capital Management Global Advisors LLC into significant shareholders, and diluting the stake of major Portuguese shareholder Pharol SGPS SA.

The plan has been formally recognized in courts in Brazil and the United States.

Common shares in Oi, which have been volatile in recent years, climbed 4 percent in late morning trade, while preferred shares were off 0.4 percent.

$1 = 3.76 reais Reporting by Gram Slattery and Ana Mano; Editing by Christian Plumb and Alistair Bell

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