The Oi drama (;) reached its final chapter after almost a decade in judicial recovery. This Monday, the 10th, the company’s bankruptcy was declared, ending once and for all the project of the once super national telecom.
The order was issued by judge Simone Gastesi Chevrand, from the 7th Business Court of Rio de Janeiro, decreeing the conversion of the recovery process into bankruptcy. “There are no more surprises regarding the status of the Group in judicial recovery. Oi is technically bankrupt”, he described.
In the order, the judge also pointed to the orderly liquidation of Oi’s assets, aiming to maximize the amount to pay the remaining balance to creditors. “Once the rampant liquidation drive has ceased, in addition to ensuring uninterrupted connectivity services, it is possible to proceed with their orderly liquidation, in the search for maximizing assets for the benefit of all those affected by the result of this process”.
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The judge ordered the provisional continuation of Oi’s activities until the services are taken over by other companies.
For now, Oi’s operation will be handled by one of the legal administrators of the process, the Preserva-Ação office, which had already been appointed intervenor after the removal of the company’s management and council. The Court also waived the continuity of services provided by the other two administrators (Wald and K2 offices).
The decision to bankrupt Oi was taken after the company and its intervenor pointed out a situation of business insolvency, on Friday, 7th. The parties cited the impossibility of the company paying its debts, nor adopting measures to boost its cash flow.
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Furthermore, Oi had already failed to comply with parts of its ongoing recovery plan. “Despite all attempts and efforts, there is no possibility of balancing the company’s assets and liabilities. There is no minimum financial viability in fulfilling the obligations owed by Oi”, stated Chevrand.
The judge gave the green light for the creditors to call a meeting in which they will elect a committee to deal with the company’s liquidation. At this time, all actions and executions against the bankrupt company are suspended, according to a court order.
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Before going to hell, Oi even asked to make the current payment conditions to creditors more flexible, but this was not appreciated, given the problems observed. “What was verified by the accounts presented by the Judicial Administration is that the amendment proposal, even if it were approved by the creditors, would not be able to eliminate the insolvency situation experienced by the group”, cited the judge.
Oi entered recovery for the first time in 2016, with R$65 billion in debt. Today, it is in its second recovery, with more than R$15 billion still to be paid in debts inside and outside the recovery process.
A few weeks ago, the company requested changes to the recovery plan with a view to making agreements with creditors more flexible, which was not approved.
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Furthermore, Oi organized itself to open a new recovery process in the United States, also without success.
