SAO PAULO, April 19 A Dutch court on Wednesday
ordered two subsidiaries of Brazilian phone company Oi SA
to begin bankruptcy proceedings, giving some
creditors a new form of leverage for their fight in Brazil's
biggest-ever bankruptcy case.
The ruling, which overturned a lower court's decision in
February, gives Oi the chance for a final appeal before the
Dutch Supreme Court, which the company said it would request.
If Wednesday's ruling stands, court-appointed trustees for
Oi Brasil Holdings Coöperatief UA and Portugal Telecom
International Finance BV will be tasked with liquidating the
units to repay creditors.
Oi's two Dutch subsidiaries issued about 5.8 billion euros
($6.2 billion) of debt, representing most of the company's
outstanding bond debt of approximately 8.5 billion euros.
Those funds were passed largely to the parent company, which
is protected from creditors by its own restructuring process in
a Brazilian court, where the judge will have a say over claims
from trustees of the Dutch subsidiaries.
Oi said in a securities filing that the Dutch ruling had no
impact on its day-to-day operations, including sales,
maintenance and investments.
In June, Oi filed for Brazil's largest-ever bankruptcy
protection process, in an effort to restructure about 65 billion
reais ($21 billion) of bond, bank and regulatory liabilities.
The Dutch case created an early divide among the company's
bondholders. Investors such as Aurelius Capital Management LP,
Attestor Capital LLC, Citadel LLP and York Capital Management
formed the so-called International Bondholder Committee to press
their case in the Netherlands while a group advised by Moelis &
Co focused exclusively on the Brazilian case.
The International Bondholder Committee, which holds more
than $2 billion of bonds issued by the two Dutch companies and
other Oi units, declined to comment on Wednesday's ruling.
($1 = 3.149 reais)
(Reporting by Brad Haynes and Alberto Alerigi Jr.)