Beleaguered Brazilian fixed-line provider Oi has been authorised to take out a loan of US$275 million from its creditors.
TeleGeography reports that the authorisation was granted by Judge Fernando Viana of the 7th Corporate Court of the Judicial District of the Capital of the State of Rio de Janeiro in response to Oi’s claims that it would not be able to continue its operations through April without an injection of cash to pay salaries and meet near-term obligations.
Oi had warned the judge: “In April Oi’s cash flow could reach a level incompatible with the responsible management of a company of this size, with a possible impact on the regular maintenance of its activities.”
TeleSintese reports that Oi is set to use its 34% stake in V.tal as collateral for the loan. Since Oi uses some of V.tal’s reversible assets in its day-to-day operations, it is not permitted to sell off its stake in the neutral fibre provider. Antel reinforced this message in March, with the regulator’s president Carlos Baigorri saying: “A dilution of V.tal is possible, but it cannot be such that Oi ceases to be the company’s controlling shareholder.”
