Oi Delays Annual U.S. Filing Because of Impairment Charges

  • Writedowns could lead to significant changes in results
  • Brazil phone carrier in restructuring talks with bondholders

Oi SA delayed the filing of its annual report to the U.S. Securities Exchange Commission, saying it needs more time to determine impairment charges for assets under American accounting rules.

Impairments would need to be recorded as expenses and could make significant changes in financial results, the Brazilian phone carrier said in a filing Tuesday. Under local accounting rules, the company reported fourth-quarter earnings in March that missed analysts’ estimates as more customers defected.

Oi, Brazil’s most indebted phone operator, is in talks with a group of bondholders on a restructuring plan. The company operates part of the country’s landline phone system, which has proven onerous because of a legal commitment to expand and maintain the obsolete network. Oi had about 5 billion reais ($1.4 billion) of interest expense in 2015, far more than the roughly 2.7 billion reais of operating income it had available to pay those costs, according to data compiled by Bloomberg.

Oi joins several Brazilian companies that have put off filings. State-run utility Centrais Eletricas Brasileiras SA is planning to take a writedown because of corruption when it files its long-delayed U.S. financial statements in mid-May, two people with direct knowledge of the matter said in April, asking not to be identified because the subject is private. The company said in a filing late Friday that it is working to file the 2014 and 2015 20-F forms by the May 18 deadline.

The construction arm of conglomerate Odebrecht SA, which isn’t publicly traded, released a statement to investors in a restricted area of its website this week saying it was postponing the release of its 2015 earnings due to auditors’ requests for information related to the Carwash corruption probe.

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