NEW YORK, Feb. 10, 2017 /PRNewswire/ -- The Steering Committee of the International Bondholder Committee announced today that it has appealed last week's decision by the Amsterdam District Court to deny the conversion of the suspension of payments of Oi Brasil Holdings Coöperatief U.A. ("Coöp") into bankruptcy. The Steering Committee understands that the indenture trustee for the bonds of Portugal Telecom International Finance B.V. ("PTIF") (together with Coöp: the "Dutch Companies") has appealed a similar decision by the Court with respect to PTIF. The Dutch Companies have outstanding bonds in the aggregate face amount of approximately $6.2 billion, which have been guaranteed by Oi S.A. Coöp is the largest creditor of Oi S.A. and its subsidiary Oi Móvel S.A.
The Dutch Companies remain subject to oversight by court-appointed administrators and supervisory judges. Those administrators, the Steering Committee, PTIF indenture trustee, and various other creditors had asked the Court to convert those proceedings to bankruptcies and to appoint independent fiduciaries to supplant the conflicted directors appointed by Oi S.A.
The Amsterdam District Court denied the conversion requests as premature on account of the Oi group having filed only a "draft" restructuring plan in the Brazilian insolvency proceedings. The Court accepted Coöp's assurances that its claims against Oi S.A. and Oi Móvel S.A. will not be harmed; and directed the Dutch Companies to provide the administrators with the separate-company and other information they require to ensure a fair outcome. The Court also ruled that the conduct of a company prior to the start of its suspension of payments – no matter how illegal and prejudicial – can never provide a basis to convert those proceedings to bankruptcy. The appellate court is expected to rule this spring.
Allan Brilliant, a Partner at Dechert LLP, US counsel to the International Bondholder Committee, said: "We respectfully believe the District Court erred by, among other things, ignoring the gross misconduct that we allege occurred since mid-2015 and trusting Coöp's assurances that claims against its affiliates will be respected. We believe that the appeal we have filed is based on strong legal grounds and that the conversion into bankruptcy will prevent further actions that are detrimental to the interests of the Dutch Companies."
Mr. Brilliant further stated that: "The Steering Committee remains committed to working with management, the Dutch administrators, Anatel, and all stakeholders to negotiate a prompt consensual restructuring of the Dutch Companies and the rest of the Oi group in a manner consistent with the laws of Brazil, the Netherlands, and the United States."
That goal will require all parties to make compromises, but the Steering Committee will be guided by the following principles:
- The Oi group should be dramatically de-leveraged to enable it to make any necessary investments and position itself for sustainable, profitable growth over the long-term.
- Distributions should fairly take into account the creditors' respective rights and the separateness of entities, including intercompany claims.
- The restructuring should treat similarly situated creditors equally.
- If there is a proven need to raise new capital, all creditors should be afforded the opportunity to provide it on a fair and equitable basis.
The International Bondholder Committee holds more than $2 billion of bonds issued by the Dutch Companies and other members of the Oi group. Bondholders interested in joining the Committee should contact Allan Brilliant at firstname.lastname@example.org or Corrado Varoli at email@example.com. The Committee does not assume any fiduciary or other duties.
Contact: Brunswick Group
Tel: +55 11 3076 7620
E- mail: firstname.lastname@example.org
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SOURCE International Bondholder Committee