(Recasts to add Schroeder interview, analysts and investors
By Ana Mano
SAO PAULO, March 23 A new reorganization plan
from Brazil's debt-laden phone carrier Oi SA boosted shares on
Thursday, but analysts continued to focus on the need for fresh
capital after a heavy fourth-quarter loss.
Changes to the plan revealed late on Wednesday would offer
Oi's financial creditors 25 percent of its equity or convertible
bonds to be called in three years, at which point they could own
up to 38 percent of the company's shares.
The updated plan would more than halve Oi's total financial
debt to about 21 billion reais from 48 billion reais, analysts
at Credit Suisse said on Thursday. If approved, Oi's plan would
impose an 86 percent writeoff on bondholders owed about 31
billion reais of claims, according to Itaú BBA analysts.
Oi's common shares rose nearly 16 percent to 4.81
reais on Thursday, on track for their biggest one-day gain in
nearly three weeks.
Itaú analysts said Oi is offering better restructuring
terms, but they underscored a need for a capital injection to
ensure Oi maintains investment capacity.
Oi's Chief Executive Marco Schroeder told Reuters that the
company generates enough cash to meet financial obligations and
make necessary investments after the restructuring.
"A capital injection could be important, but we would only
accept one if we receive a balanced proposal that takes into
account the interests of all stakeholders," he said in an
Talks with potential investors including Cerberus Capital
Management and Paul Singer's Elliott Management Corp have not
produced concrete results, he added.
In December, Oi received a binding proposal from a group of
bondholders supported by Orascom TMT Holdings SAE to inject up
to $1.25 billion into the carrier in exchange for a 95 percent
Schroeder said Orascom's plan would be hard to implement as
it offers unequal treatment to distinct bondholder groups. Also,
this plan gives creditors too large a stake, the executive said.
Oi's updated plan should be submitted to the court in its
current form, but technically it can be changed until the moment
creditors formally vote on it in court, Schroeder said.
Schroeder said Oi included an immediate debt-for-equity
swap, which he expects will face a creditor vote by June, to
accommodate feedback from creditors.
Oi also reported losing 3.3 billion reais in the final
quarter of 2016, a narrower loss from the comparable quarter in
2015 due to cost cutting and lower financial expenses.
($1 = 3.14 reais)
(Reporting by Ana Mano; Editing by Paul Simao and Cynthia