January 8, 2018 / 5:49 PM / a year ago

Judge OKs Oi restructuring, says shareholders meeting not needed

SAO PAULO, Jan 8 (Reuters) - The judge overseeing the restructuring process of Brazilian telecom company Oi SA approved a massive debt restructuring plan on Monday and called a proposed shareholders meeting “absolutely unnecessary.”

In the decision, Judge Fernando Viana gave the official go-ahead to Latin America’s largest ever in-court debt reorganization. On Dec. 20, a majority of Oi creditors approved a plan to restructure 65 billion reais ($20.1 billion) of debt, putting an end to a year and a half of negotiations.

The plan upset major shareholders, however, as it hands up to 75 percent of the company to creditors that include distressed debt funds, such as Aurelius Capital Management, and severely dilutes equity.

Earlier on Monday, Bratel Brasil SA, a subsidiary of Oi investor Pharol SPGS SA, said it was calling for a general shareholders meeting on Feb. 7 and that it believed the restructuring process had violated company statutes.

Viana, however, said such a meeting could add uncertainty to the restructuring.

“The convocation of the general shareholders meeting is absolutely unnecessary to validate the creditors’ sovereign decision,” he wrote.

“On the contrary, a convocation of shareholders ... would again bring about the instability that was strongly rejected by the judiciary throughout this whole judicial recuperation process.”

A Pharol representative did not have an immediate comment about the judge’s decision.

$1 = 3.23 reais Reporting by Gram Slattery; Editing by Lisa Von Ahn

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