Brazil's Oi Proposes 25 Percent Limit to Debt-for-Equity Swap

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Brazilian phone carrier Oi SA submitted a plan on Wednesday to restructure its 65.4 billion-real ($21 billion) debt burden with a proposal to limit the debt-for-equity swap demanded by creditors to 25 percent of capital, Reuters reported. The plan was delivered to a Rio de Janeiro court and creditors of the largest-ever bankruptcy proceeding in Latin America will vote on it on Oct. 23. Oi proposes to inject up to 9 billion reais, of which 6 billion reais would come from a stock offering and the rest through the debt-for-equity swap. The company agreed to raise the company’s annual capital expenditures to 7 billion reais from 5 billion, as previously demanded by creditors. The conversion of the existing debt would be limited to 25 percent of the company’s capital, but creditors may reach a larger stake in Oi by participating later in the stock offering planned by Oi. Read more.