February 7, 2018 / 7:01 PM / a year ago

Judge says Oi shareholders meeting has no effect on restructuring

SAO PAULO, Feb 7 (Reuters) - A Rio de Janeiro judge decided on Wednesday that a shareholders meeting called by a major equity holder in debt-laden Brazilian telecoms carrier Oi SA will have no legal effect on the company’s in-court restructuring.

Responding to various petitions from Oi shareholders, Judge Ricardo Lafayette Campos also upheld a plan approved by bondholders in December and courts in January to take the company out of bankruptcy protection.

“I maintain ... the decision that made the recovery plan official,” he wrote.

In December, after a dramatic and fractious 18-month battle, bondholders in Oi - Brazil’s largest fixed-line carrier - approved the plan to take the carrier out of bankruptcy protection and inject billions of dollars of fresh capital into the carrier.

During the proceedings, the judge overseeing the case removed the company’s board from the process, and creditors eventually approved a plan with a significant equity dilution.

That enraged many of Oi’s equity holders, including its largest, Pharol SGPS SA.

In contradictory statements this week and last, Pharol said it was calling a shareholders meeting on Wednesday to deliberate on various aspects of the recovery plan, while Oi said there would be no meeting.

In the Wednesday decision, Judge Lafayette clarified that no meeting outside the courts would have an effect on the restructuring process.

A representative for Pharol did not immediately respond to a request for comment.

Reporting by Gram Slattery; Editing by Susan Thomas

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