Oi CEO Gontijo Resigns Amid Carrier’s Restructuring Talksby and
Financial Administrative Officer Schroeder named new CEO
Brazilian wireless operator has almost $14.6 billion in debt
Oi SA Chief Executive Officer Bayard Gontijo resigned, departing Brazil’s most indebted phone carrier amid restructuring talks with debtholders.
Gontijo, 44, will be replaced by Financial Administrative Officer Marco Schroeder, 51, according to a filing Friday. Schroeder will also retain his financial role, Oi said.
The departure of Gontijo, who led the company for less than two years, adds another element of uncertainty for Rio de Janeiro-based Oi as it seeks to dig out from under almost 50 billion reais ($14.6 billion) in debt. The company didn’t give a reason for Gontijo’s departure.
Gontijo disagreed with some board members on how to proceed with negotiations with debtholders, and he decided to resign to allow negotiations to move on quickly, said a person familiar with the matter.
Debtholders involved in the talks were surprised by the resignation of Gontijo, who had met with them in recent days, according to another person, who asked not to be identified discussing private information. Any disagreement among Oi executives about the restructuring details wasn’t apparent to debtholders, the person said.
As recently as two weeks ago, Oi’s restructuring talks had been advancing, with six investors signing a confidentiality agreement to access company information, people familiar with the matter said at the time.
Oi, whose name means “hi” in Portuguese, is the fourth-biggest mobile-phone operator in Brazil. It also operates part of the country’s landline phone system, which has proven onerous -- the company has a legal commitment to expand and maintain the obsolete network. It had about 5 billion reais of interest expenses 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.
The carrier said in March it hired PJT Partners Inc. for advice on how to manage its debt. Customers won’t be affected by the reorganization, the phone carrier has said.