October 12, 2017 / 4:04 PM / 6 months ago

Auditor values Oi assets at $12.9 billion in Brazil bankruptcy case

SAO PAULO (Reuters) - Oi SA’s (OIBR3.SA) assets are worth 40.8 billion reais ($12.9 billion) but that could drop by more than a half if the indebted Brazilian phone company is forced to sell them in a hurry, a financial auditor said on Thursday.

FILE PHOTO: Consumers stand in front of an Oi store, Brazil's largest fixed-line telecoms group, in Sao Paulo, Brazil June 24, 2016. REUTERS/Paulo Whitaker

Auditor Ernst & Young LLP estimated the so-called forced liquidation value of assets held by Oi and subsidiaries included in its bankruptcy protection process at 17.9 billion reais, according to a securities filing.

That would cover less than 30 percent of the 65.4 billion reais worth of debt under renegotiation.

    The figures highlight the difficulties of finding a solution for Oi’s debt problems as management, bondholders and regulators struggle to reach consensus in Brazil’s biggest-ever in-court renegotiation case.

    Oi on Wednesday submitted a debt restructuring plan that would limit the debt-for-equity swap demanded by creditors to 25 percent of its capital, far below the 88 percent proposed by a group of bondholders in August.

    Reporting by Bruno Federowski; Editing by Steve Orlofsky

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