SAO PAULO/RIO DE JANEIRO, Dec 19 (Reuters) - Creditors of Oi SA were to gather in downtown Rio de Janeiro on Tuesday to vote on a plan to take the Brazilian telecoms operator out of bankruptcy protection, despite a flurry of legal actions by a key shareholder trying to stop the vote.
Oi's management appeared likely to win over enough support from creditors to restructure some 65.4 billion reais ($19.9 billion) in debt after a year and a half of contentious talks in Latin America's biggest-ever bankruptcy case.
Major bondholders have already expressed support for the plan, which could give them control of the company through a debt-for-equity swap. Others, such as state development bank BNDES, whose support is required for passage, have been more circumspect.
To complicate matters, influential shareholder Nelson Tanure, whose investment vehicle Societe Mondiale controls the board through alliances, has been peppering courts and regulators with complaints for days after a judge effectively removed him from negotiations.
At stake in the process, which has been plagued by fighting among shareholders, bondholders, and the government, is the sole fixed line carrier in over 2,000 of the country's 5,000 municipalities and the employer of over 100,000 Brazilians.
"The plan guarantees longevity for Oi and the maintenance of high quality services to clients," Chief Executive Eurico Teles said in a statement on Monday afternoon.
Under the restructuring plan, bondholders such as distressed asset specialists Aurelius Capital Management and Goldentree Asset Management can trade their debt for up to 75 percent of the carrier's capital. Investors will also inject 4 billion reais of fresh capital.
In recent days, Societe Mondiale has filed petitions with Brazil's solicitor general, the national telecoms regulator and Rio courts, among other bodies. Among their allegations is that a late November move by a judge to remove the board from the debt negotiating process was illegal.
They also complain that the plan will not sufficiently capitalize Oi. Shareholders had previously proposed plans with cash injections of up to 5.5 billion reais.
If the petitions do not result in a delay, creditors will meet at 11 a.m. local time (1300 GMT). The meeting is expected to last for hours and could spill over to Wednesday.
$1 = 3.29 reais Reporting by Gram Slattery; Editing by Cynthia Osterman