BRASILIA (Reuters) - Changes in Brazil’s telecom law currently under debate in the Senate are not being taken into account by debt-laden carrier Oi SA as it devises its in-court reorganization plan, Oi Chief Executive Marcos Schroeder said on Tuesday.
Speaking at an industry event in Brasília, Schroeder said the imminent reforms will have no economic effect on the company’s reorganization in bankruptcy court.
The bill had been scheduled to become law last December but was held up in the Senate after opposition legislators filed a motion to submit it to a vote by the full house.
Poised to become law after passing committees in both chambers of Congress, the reform aims to update a concession-based model that had created uncertainty about the value of the industry’s fixed-line assets.
Schroeder’s comments suggest that Oi will not let the reform’s current legal limbo slow negotiations with creditors to restructure about 65.4 billion reais ($21.1 billion) of bank debt, bonds and regulatory liabilities.
Schroeder said Oi will present an amended debt restructuring plan next month and put it to a creditor vote between April and June. The company made its first proposal in September but a large group of lenders rejected it. [nIFR5V2VPK]
Schroeder reiterated the plan will involve a reduction of the company’s debt as well as a debt-for-equity swap. He said the nominal value of the bond debt, about 32 billion reais, would be reduced by 70 percent while debt notes representing about 10 billion reais would be converted into Oi equity.
Bank debt should be repaid in 17 years under the amended plan, he said.
In the second half of this year, Oi also intends to start negotiations with potential international investors interested in providing capital to the company, Schroeder said.
A stay of execution, which protects Oi from creditor suits while it devises a plan to avoid bankruptcy, will expire in May.
($1 = 3.095 reais)
Reporting by Leonardo Goy; Writing by Ana Mano; Editing by Bill Trott