September 19, 2018 / 11:28 PM / a year ago

Brazil court rules Oi's fines are subject to bankruptcy recovery

SAO PAULO, Sept 19 (Reuters) - A Rio de Janeiro appeals court has determined that billions of dollars in fines owed to regulators by Brazil’s Oi SA will be included in the company’s bankruptcy recovery package, a ruling showed on Wednesday.

Oi, Brazil’s largest fixed line telecom company, entered bankruptcy in 2016, and in late 2017 creditors approved a plan to convert billions of dollars of debt into fresh equity.

Brazilian telecoms regulator Anatel, however, which Oi owed some 14 billion reais ($3.39 billion) in fines, claimed in court that its debt should not be subject to the plan in the same manner as other debt classes.

With the court’s decision, a significant impediment to Oi’s recovery plan has been removed along with the possibility of fines lingering over the company.

“The fact that the credit is a public entity does not modify the nature of the debt,” the court wrote.

($1 = 4.13 reais)

Reporting by Gram Slattery

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