Beleaguered Brazilian operator Oi is unlikely to receive a government bailout, according to the country’s communications minister.
Gilberto Kassab noted that while the government is keen to expedite Oi’s exit from bankruptcy, it is not as yet considering any kind of direct intervention, saying: “There’s no such intention, we are just preparing ourselves in case of an event that could lead to an intervention.”
“But, I can tell you, so far, there’s no reason to intervene Oi. We are doing our part to lend Oi support”, added Kassab. He noted that the government was aiming to find a “market-based solution” to allow Oi to prosper once it is out of creditor protection.
Kassab also hinted that the government could overhaul Brazil’s bankruptcy laws to facilitate Oi’s situation. This would likely involve a significant rewriting of current operator regulation.
Oi is the largest fixed player in Brazil and fourth largest overall. In June this year, it filed for bankruptcy protection as it attempts to deal with its significant debt. In September, American Movil expressed an interest in acquiring some or all of Oi’s assets, while billionaire telecoms investor Naguib Sawiris has also thrown his hat into the ring.