October 26, 2018 / 7:02 PM / a year ago

Portuguese court recognizes Oi recovery plan

SAO PAULO, Oct 26 (Reuters) - A Portuguese court approved on Friday a debt restructuring plan that was passed by creditors in major Brazilian telecom firm Oi SA, marking a step forward in the company’s tortured bankruptcy recovery process.

With the court’s approval, seen by Reuters, bankruptcy courts in all relevant jurisdictions - Brazil, the United States, the Netherlands, and now Portugal - have signed off on the recovery plan, which was approved by creditors in December.

In late July, Oi completed a debt-for-equity swap in which several hedge funds swapped billions of dollars in debt for fresh equity in the reorganized firm. The company, Brazil’s largest fixed-line telecom player, expects to receive a 4 billion-real ($1.1 billion) capital injection in early 2019 to help it boost capital expenditures and shore up its debt profile.

Oi is not out of the woods yet, however. Earlier in October, a Brazilian court cleared the way for arbitration talks between Oi and shareholder Pharol SGPS SA overseen by Brazil’s B3 SA stock exchange operator.

Common shares in Oi rose on the news, and were trading up 5.6 percent in afternoon trade.

$1 = 3.64 reais Reporting by Gram Slattery Editing by James Dalgleish

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