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Brazil may extend Oi debt maturity as Temer joins talks - paper
October 10, 2017 / 1:04 PM / 2 months ago

Brazil may extend Oi debt maturity as Temer joins talks - paper

BRASILIA, Oct 10 (Reuters) - Brazil may extend the maturities of debt owed by Oi SA to public institutions, newspaper Folha de S.Paulo reported on Tuesday, a day after President Michel Temer joined talks to accelerate the wireless carrier’s emergence from bankruptcy protection.

The government may introduce legislation allowing companies to extend the maturity of debt with government agencies for up to 20 years, from the current five, Folha said, without specifying how it obtained the information. Oi is renegotiating 65 billion reais ($20.5 billion) worth of debt, over 10 billion reais of which it owes to telecommunications regulator Anatel. Oi could also be allowed to deduct some investments from the fines it owes to Anatel, the newspaper said, but many government officials are skeptical that it would be able to meet capital spending goals.

Oi and government representatives were not immediately available for comment.

Temer met with government officials and executives from state-owned banks on Monday to discuss solutions to Oi’s debt reorganization, in Brazil’s biggest-ever bankruptcy protection case, two government sources told Reuters.

The officials set up a working group led by Attorney General Grace Mendonça to mediate talks between the government and the wireless carrier, the people said.

Oi must file a restructuring plan by Wednesday after repeatedly clashing with creditors over the terms of the deal. The company is expected to propose a capital hike of 9 billion reais comprised of a debt-for-equity swap worth 6 billion reais and a 3 billion real share sale.

$1 = 3.17 reais Reporting by Leonardo Goy and Lisandra Paraguassu; Writing by Bruno Federowski; Editing by Susan Thomas

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