Oi Bondholders in Talks With Billionaire Sawiris for New Plan

  • Alternative to be developed to Oi’s restructuring program
  • Sawiris says he’s confident in outlook for Brazilian economy

Oi SA’s largest group of bondholders is in talks with billionaire investor Naguib Sawiris to draft an alternative to the Brazilian phone company’s plan to recover from bankruptcy protection.

The debtholders, advised by Moelis & Co., and Sawiris will also develop an operating plan for Oi to follow after it emerges from bankruptcy, with “considerable new capital and investments,” they said in a statement Tuesday.

The creditors represented by Moelis have balked at Oi’s restructuring proposal, arguing that its use of convertible debt would let current shareholders avoid dilution if the company manages to turn around, while leaving bond investors with a large loss if things go badly. The bondholder committee holds about 40 percent of Oi’s outstanding bonds, or about $4 billion, and includes some 70 members.

Sawiris, 62, used a series of telecommunications transactions to build a fortune that has made him Egypt’s second-richest person, with a net worth of about $4.1 billion, according to the Bloomberg Billionaires Index. He has expressed interest for months in investing in Oi, saying last month that the company would have good potential once its debt is restructured and provided the company gets a capital increase and a strong industrial plan.

Oi filed for protection from creditors in June amid a looming bond payment. Sawiris said at the time that a merger between Oi and Tim Participacoes SA makes “a lot of sense,” but that first Oi needs to stand on its own feet.

“I’m confident in the outlook for Brazil, in its economy and its people,” Sawiris said. “By supporting the bondholder committee, together with our experience in the industry, we’ll help Oi with a win-win solution to achieve positive results for all the interested parties.”

Oi declined to comment.

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