SAO PAULO, Oct 10 (Reuters) - Brazilian phone carrier Oi SA's board has approved a plan to cut a 65.4 billion-real ($21 billion) debt burden that includes a capital injection, in an effort to emerge faster from bankruptcy protection and avert a government intervention, a person with knowledge of the matter said on Tuesday.
According to the person, who requested anonymity because the matter remains private, Oi's largest shareholders have agreed with a management proposal to inject 9 billion reais into the carrier, part of it through a debt-for-equity swap. Oi has until Wednesday to deliver the so-called recovery plan to a commercial court in Rio de Janeiro.
Oi's in-court reorganization, which begun in June 2016 and is Latin America's largest on record, has been marked by disputes between shareholders led by Pharol SGPS SA and Societé Mondiale FIA, and bondholders represented by the Ad Hoc Group of Bondholders and the International Bondholder Committee.
A press officer at Oi declined to comment.
The board's plan aims to prevent more legal wrangling ahead of the Oct. 23 creditor vote, while ensuring that the government does not cancel Oi's operating licenses, the source said. Late last month, Communications Minister Gilberto Kassab said that creditors and shareholders needed to be at peace for Oi to avoid losing its licenses.
Common shares of Rio de Janeiro-based Oi added 2 percent to 4.99 reais on Tuesday, extending gains this year to 90 percent. Preferred shares of Brazil's No. 4 wireless carrier added 3.3 percent to 3.71 percent.
$1 = 3.1767 reais Reporting by Guillermo Parra-Bernal and Gram Slattery; editing by Grant McCool