Debt & Liquidity
Tab
le
10 –
Debt
R$ Million
|
Dec/17
|
Dec/16
|
Sep/17
|
|
% Gross Debt
|
Debt
|
|
|
|
|
|
Short Term
|
54,620
|
48,191
|
51,827
|
|
100.0%
|
Long Term
|
0
|
0
|
0
|
|
0.0%
|
Total Debt
|
54,620
|
48,191
|
51,827
|
|
100.0%
|
In Local Currency
|
14,835
|
13,448
|
14,531
|
|
27.2%
|
In Foreign Currency
|
39,681
|
34,638
|
37,191
|
|
72.6%
|
Swaps
|
105
|
105
|
105
|
|
0.2%
|
(-) Cash
|
-6,999
|
-7,849
|
-7,717
|
|
-12.8%
|
(=) Net Debt
|
47,621
|
40,342
|
44,109
|
|
87.2%
|
Oi S.A. ended 4Q17 with consolidated gross debt of R$ 54,620 million, R$ 2,793 million more than in 3Q17. Compared with the end of 2016, consolidated gross debt increased R$ 6.429 million.
Both the sequential and the annual increases were mainly due to interest accrual and the depreciation of the Real against the Dollar and the Euro in both periods, as explained earlier. It is worth noting that, on December 20, 2017, as per the Material Fact disclosed on that date, the creditors of the Company and its subsidiaries Oi Móvel S.A., Telemar Norte Leste S.A., Copart 4 Participações S.A., Copart 5 Participações S.A., Portugal Telecom International Finance BV and Oi Brasil Holdings Coöperatief U.A. ("Oi Companies"), approved the Judicial Reorganization Plan, which had not been ratified and published by the end of 2017. As a result, for accounting and disclosure purposes, the balances of loans and financing recorded in the table above do not reflect the new negotiated debt.
At the end of 4Q17, net debt stood at R$ 47,621 million, R$ 3,512 million more than in 3Q17. The increase in net debt was chiefly due to higher gross debt, as previously explained, combined with the 9.3% sequential reduction in cash, impacted by payments related to regulatory obligations in the period and payments to creditors as a result of the Creditors Settlement Program. Net debt grew R$ 7,279 million over 4Q16, due to the increase in gross debt, despite positive operational cash generation in the period.
Table 11 – Cash Position (Brazilian operations)
R$ Million
|
|
3Q17 Cash Position
|
7,717
|
Routine EBITDA
|
1,300
|
Capex
|
-1,835
|
Working capital
|
458
|
Anatal fees
|
-4
|
Judicial Deposits + Taxes
|
-406
|
Financial operations
|
78
|
3G and 4G Licenses
|
0
|
Payments to Creditors JR
|
-310
|
4Q17 Cash Position
|
6,999
|
Table 12 – Gross Debt Breakdown
R$ Million
|
|
Gross Debt Breakdown
|
4Q17
|
Int'l Capital Markets
|
35,636
|
Local Capital Markets
|
4,908
|
Development Banks and ECAs
|
9,705
|
Commercial Banks
|
4,565
|
Hedge and Borrowing Costs
|
-194
|
Total Gross Debt
|
54,620
|
Historical Reclassified Net Revenue and Revenue Generating Units (RGUs)
In 4Q16, the Company revised and changed the criteria for segmenting revenues and revenue generating units (RGUs) among the various business units (BUs), as it believes this new breakdown better reflects how the businesses are managed. Historical revenue and RGU figures were adjusted in order to reflect this change. The historical reclassified data is shown in the tables below:
|
4Q17
|
3Q17
|
2Q17
|
1Q17
|
4Q16
|
3Q16
|
2Q16
|
1Q16
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
3Q14
|
2Q14
|
1Q14
|
4Q13
|
3Q13
|
2Q13
|
1Q13
|
Residential
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues (R$ million)
(1)
|
2,269
|
2,321
|
2,227
|
2,354
|
2,315
|
2,345
|
2,368
|
2,348
|
2,337
|
2,393
|
2,406
|
2,436
|
2,407
|
2,380
|
2,428
|
2,487
|
2,538
|
2,565
|
2,580
|
2,550
|
Revenue Generating Units (RGU) - ('000)
(1)
|
15,885
|
16,121
|
16,272
|
16,343
|
16,425
|
16,498
|
16,573
|
16,620
|
16,780
|
17,034
|
17,329
|
17,719
|
18,066
|
18,052
|
18,226
|
18,437
|
18,689
|
19,302
|
19,512
|
19,674
|
Fixed Line in Service
|
9,233
|
9,465
|
9,657
|
9,802
|
9,947
|
10,087
|
10,228
|
10,336
|
10,515
|
10,748
|
11,007
|
11,303
|
11,590
|
11,806
|
12,099
|
12,359
|
12,630
|
13,073
|
13,338
|
13,614
|
Fixed Broadband
|
5,156
|
5,207
|
5,219
|
5,204
|
5,188
|
5,164
|
5,149
|
5,115
|
5,109
|
5,127
|
5,151
|
5,197
|
5,241
|
5,223
|
5,248
|
5,255
|
5,235
|
5,317
|
5,272
|
5,223
|
Pay TV
|
1,496
|
1,449
|
1,396
|
1,336
|
1,290
|
1,247
|
1,197
|
1,168
|
1,156
|
1,158
|
1,171
|
1,220
|
1,235
|
1,023
|
879
|
823
|
824
|
912
|
902
|
837
|
ARPU Residential (R$)
|
81.3
|
81.1
|
76.5
|
79.6
|
77.2
|
77.1
|
77.0
|
75.2
|
73.5
|
73.6
|
72.2
|
71.3
|
68.8
|
66.7
|
66.4
|
66.6
|
65.9
|
65.0
|
64.0
|
62.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4Q17
|
3Q17
|
2Q17
|
1Q17
|
4Q16
|
3Q16
|
2Q16
|
1Q16
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
3Q14
|
2Q14
|
1Q14
|
4Q13
|
3Q13
|
2Q13
|
1Q13
|
Personal Mobility
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues (R$ million)
(1)
|
1,887
|
1,939
|
1,872
|
1,947
|
1,945
|
1,940
|
1,938
|
2,027
|
2,090
|
2,042
|
2,012
|
2,251
|
2,417
|
2,164
|
2,210
|
2,147
|
2,369
|
2,327
|
2,250
|
2,311
|
Service
|
1,827
|
1,884
|
1,814
|
1,890
|
1,886
|
1,897
|
1,872
|
1,968
|
2,033
|
1,990
|
1,944
|
2,052
|
2,135
|
1,961
|
2,002
|
2,034
|
2,208
|
2,229
|
2,122
|
2,163
|
Customer
(2)
|
1,693
|
1,761
|
1,713
|
1,748
|
1,730
|
1,754
|
1,733
|
1,779
|
1,814
|
1,773
|
1,751
|
1,792
|
1,791
|
1,629
|
1,677
|
1,635
|
1,718
|
1,676
|
1,591
|
1,592
|
Network Usage
|
135
|
123
|
100
|
141
|
156
|
143
|
138
|
189
|
219
|
217
|
193
|
260
|
344
|
332
|
324
|
399
|
490
|
554
|
532
|
571
|
Sales of handsets, SIM cards and others
|
60
|
55
|
58
|
57
|
59
|
43
|
66
|
58
|
56
|
52
|
68
|
199
|
281
|
202
|
208
|
114
|
161
|
97
|
128
|
148
|
Revenue Generating Units (RGU) - ('000)
(1)
|
36,648
|
39,626
|
39,802
|
39,837
|
39,870
|
44,118
|
45,319
|
45,559
|
45,860
|
47,059
|
47,756
|
47,938
|
48,462
|
48,976
|
48,618
|
48,145
|
47,727
|
47,337
|
46,896
|
46,569
|
Prepaid Plans
|
29,917
|
32,807
|
32,963
|
32,957
|
32,997
|
37,318
|
38,299
|
38,668
|
39,068
|
40,296
|
40,719
|
40,824
|
41,322
|
41,990
|
41,801
|
41,417
|
41,019
|
40,676
|
40,235
|
39,905
|
Postpaid Plans
(3)
|
6,731
|
6,820
|
6,839
|
6,880
|
6,872
|
6,800
|
7,020
|
6,891
|
6,791
|
6,763
|
7,037
|
7,114
|
7,140
|
6,986
|
6,817
|
6,729
|
6,708
|
6,662
|
6,661
|
6,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4Q17
|
3Q17
|
2Q17
|
1Q17
|
4Q16
|
3Q16
|
2Q16
|
1Q16
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
3Q14
|
2Q14
|
1Q14
|
4Q13
|
3Q13
|
2Q13
|
1Q13
|
B2B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues (R$ million)
(1)
|
1,559
|
1,596
|
1,627
|
1,703
|
1,790
|
1,832
|
1,914
|
2,070
|
1,979
|
1,971
|
2,005
|
2,027
|
2,087
|
2,042
|
2,098
|
2,093
|
2,118
|
2,107
|
2,147
|
2,079
|
Revenue Generating Units (RGU) - ('000)
(1)
|
6,512
|
6,543
|
6,501
|
6,550
|
6,617
|
6,634
|
6,661
|
6,668
|
6,757
|
7,084
|
7,223
|
7,249
|
7,296
|
7,335
|
7,375
|
7,339
|
7,370
|
7,559
|
7,660
|
7,718
|
Fixed
|
3,641
|
3,685
|
3,696
|
3,727
|
3,760
|
3,794
|
3,831
|
3,875
|
3,941
|
4,053
|
4,110
|
4,154
|
4,189
|
4,231
|
4,255
|
4,247
|
4,225
|
4,239
|
4,211
|
4,167
|
Broadband
|
543
|
539
|
542
|
547
|
553
|
558
|
561
|
569
|
580
|
594
|
604
|
612
|
617
|
622
|
628
|
630
|
630
|
623
|
615
|
604
|
Mobile
|
2,316
|
2,307
|
2,251
|
2,263
|
2,290
|
2,270
|
2,256
|
2,211
|
2,223
|
2,424
|
2,497
|
2,470
|
2,478
|
2,472
|
2,485
|
2,456
|
2,511
|
2,698
|
2,834
|
2,946
|
Pay TV
|
12
|
12
|
13
|
14
|
13
|
12
|
12
|
12
|
12
|
12
|
13
|
12
|
12
|
9
|
7
|
5
|
4
|
0
|
0
|
0
|
Oi S.A. Consolida
ted
Income Statement - R$ million
(1)
|
4Q17
|
4Q16
|
3Q17
|
|
2017
|
2016
|
Net Operating Revenues
|
5,828
|
6,323
|
5,964
|
|
23,790
|
25,996
|
Operating Costs and Expenses
|
-8,025
|
-7,076
|
-4,358
|
|
-21,041
|
-21,904
|
Personnel
|
-837
|
-656
|
-682
|
|
-2,791
|
-2,852
|
Interconnection
|
-193
|
-299
|
-180
|
|
-778
|
-1,173
|
Third-Party Services
|
-1,510
|
-1,575
|
-1,573
|
|
-6,229
|
-6,399
|
Network Maintenance Service
|
-298
|
-279
|
-327
|
|
-1,243
|
-1,540
|
Handset Costs/Other (COGS)
|
-64
|
-81
|
-47
|
|
-223
|
-284
|
Marketing
|
-128
|
-151
|
-116
|
|
-414
|
-449
|
Rent and Insurance
|
-955
|
-1,107
|
-1,080
|
|
-4,163
|
-4,330
|
Provision for Contingencies
|
-7,038
|
-2,104
|
-121
|
|
-7,362
|
-2,833
|
Provision for Bad Debt
|
-319
|
-270
|
-173
|
|
-838
|
-730
|
Taxes and Other Revenues (Expenses)
|
-1,382
|
-229
|
-61
|
|
-1,700
|
-894
|
Other Operating Revenues (Expenses), net
|
0
|
0
|
0
|
|
0
|
-95
|
EBITDA
|
-2,197
|
-754
|
1,605
|
|
2,748
|
4,092
|
Margin %
|
-37.7%
|
-11.9%
|
26.9%
|
|
11.6%
|
15.7%
|
Non Routine Items
|
3,496
|
2,510
|
0
|
|
3,496
|
2,605
|
Non Routine EBITDA
|
1,299
|
1,756
|
1,605
|
|
6,244
|
6,697
|
Margin %
|
22.3%
|
27.8%
|
26.9%
|
|
26.2%
|
25.8%
|
Depreciation and Amortization
|
-1,316
|
-1,347
|
-1,257
|
|
-5,110
|
-5,483
|
EBIT
|
-3,513
|
-2,101
|
348
|
|
-2,361
|
-1,391
|
Financial Expenses
|
-3,496
|
-969
|
-371
|
|
-10,333
|
-5,061
|
Financial Income
|
5,350
|
262
|
416
|
|
7,136
|
1,372
|
Net Earnings (Loss) Before Tax and Social Contribution
|
-1,659
|
-2,807
|
393
|
|
-5,558
|
-5,080
|
Income Tax and Social Contribution
|
-2,257
|
-2,000
|
109
|
|
-1,098
|
-3,126
|
Net Earnings (Loss) from Continuing Operations
|
-3,916
|
-4,808
|
502
|
|
-6,656
|
-8,206
|
Net Results from Discontinued Operations
|
0
|
0
|
0
|
|
0
|
0
|
Consolidated Net Earnings (Loss)
|
-3,916
|
-4,808
|
502
|
|
-6,656
|
-8,206
|
Margin %
|
-67.2%
|
-76.0%
|
8.4%
|
|
-28.0%
|
-31.6%
|
Profit (Loss) attributed to the controlling shareholders
|
-3,690
|
-4,732
|
535
|
|
-6,365
|
-8,028
|
Profit (Loss) attributed to the non-controlling shareholders
|
-226
|
-75
|
-33
|
|
-291
|
-178
|
Outstanding Shares Thousand (ex-treasury)
|
675,667
|
675,667
|
675,667
|
|
675,667
|
675,667
|
Earnings per share (R$)
|
-5.4609
|
-7.0042
|
0.7922
|
|
-9.4209
|
-11.8815
|
(1) 3Q17, 2Q17, 1Q17, 4Q16 and 2016 data were adjusted as explained in the Disclaimer section of this document.
Oi S.A. Consolida
ted
Balance Sheet - R$ million
(1)
|
12/31/2017
|
09/30/2017
|
12/31/2016
|
TOTAL ASSETS
|
68,639
|
65,943
|
65,972
|
Current
|
23,748
|
25,549
|
26,356
|
Cash and cash equivalents
|
6,863
|
7,608
|
7,563
|
Financial investments
|
21
|
22
|
117
|
Derivatives
|
0
|
0
|
0
|
Accounts Receivable
|
7,367
|
7,994
|
7,891
|
Inventories
|
254
|
541
|
355
|
Recoverable Taxes
|
1,124
|
899
|
1,542
|
Other Taxes
|
1,082
|
1,099
|
978
|
Assets in Escrow
|
1,023
|
508
|
1,122
|
Held-for-sale Assets
|
4,675
|
4,721
|
5,404
|
Other Current Assets
|
1,339
|
2,157
|
1,384
|
Non-Current Assets
|
44,891
|
40,394
|
39,616
|
Long Term
|
9,415
|
10,227
|
9,439
|
.Recoverable and Deferred Taxes
|
0
|
187
|
0
|
.Other Taxes
|
628
|
706
|
739
|
.Financial investments
|
115
|
88
|
169
|
.Assets in Escrow
|
8,290
|
8,933
|
8,244
|
.Derivatives
|
0
|
0
|
0
|
.Other
|
383
|
313
|
287
|
Investments
|
137
|
140
|
136
|
Property Plant and Equipment
|
26,989
|
26,250
|
25,905
|
Intagible Assets
|
8,351
|
3,777
|
4,136
|
|
|
|
|
TOTAL LIABILITIES
|
68,639
|
65,943
|
65,972
|
Current
|
67,892
|
65,580
|
61,286
|
Suppliers
|
7,627
|
7,314
|
6,578
|
Loans and Financing
|
54,515
|
51,722
|
48,086
|
Financial Instruments
|
105
|
105
|
105
|
Payroll and Related Accruals
|
925
|
815
|
668
|
Provisions
|
963
|
956
|
1,082
|
Pension Fund Provision
|
62
|
185
|
147
|
Payable Taxes
|
567
|
511
|
473
|
Other Taxes
|
1,444
|
1,453
|
1,814
|
Dividends Payable
|
6
|
6
|
6
|
Liabilities associated to held-for-sale assets
|
354
|
680
|
545
|
Authorizations and Concessions Payable
|
20
|
16
|
107
|
Other Accounts Payable
|
1,303
|
1,816
|
1,674
|
Non-Current Liabilities
|
14,260
|
10,460
|
11,352
|
Loans and Financing
|
0
|
0
|
0
|
Financial Instruments
|
0
|
0
|
0
|
Payable and Deferred Taxes
|
3,077
|
1,265
|
1,764
|
Other Taxes
|
868
|
859
|
1,073
|
Contingency Provisions
|
6,820
|
4,901
|
4,726
|
Pension Fund Provision
|
571
|
437
|
450
|
Outstanding authorizations
|
1
|
4
|
4
|
Other Accounts Payable
|
2,924
|
2,994
|
3,335
|
Shareholders' Equity
|
-13,513
|
-10,096
|
-6,666
|
Controlling Interest
|
-13,806
|
-10,400
|
-7,457
|
Minority Interest
|
293
|
303
|
791
|
(1) 3Q17, 2Q17, 1Q17, 4Q16 and 2016 data were adjusted as explained in the Disclaimer section of this document.
Please note
The main tables disclosed in this Earnings Release will be available in Excel format in the “Financial Information / Quarterly Reports” section of the Company’s website (
www.ir.oi.com.br
).
Definitions of the terms used in the Earnings Release are available in the Glossary section of the Company’s website:
http://ri.oi.com.br/oi2012/web/conteudo_pt.asp?idioma=0&conta=28&tipo=44320
JUDICIAL REORGANIZATION PROCESS
Decision of the Court about the Officers appointed by the Board of Directors
On November 17, 2017, pursuant to Article 157, paragraph 4 of Law 6404/76 and pursuant to CVM Instruction 358/02, the Company informed its shareholders and the market in general that it was informed of the decision of the 7
th
Corporate Court of the District of the Capital of the State of Rio de Janeiro, before which the Judicial Reorganization is pending, with respect to requests made by international creditors of the Oi Companies, which ordered as a precautionary measure and until the interested parties file their statements, that the Officers appointed by the Board of Directors at a meeting held on November 3, 2017, refrain from interfering in matters related to judicial reorganization, as well as to the negotiation and preparation of the judicial reorganization plan for the Oi Companies, without prejudice to the regular exercise of their other operational duties in the direction of the Company.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=973A5BF5-2B2F-4598-9A4E-EDFCF6BCCA74
Adjustments approved by the Board of Directors to the terms and conditions of the Judicial Reorganization Plan and the Plan Support Agreement (“PSA”)
On November 22, 2017, the Company informed its shareholders and the market in general that the Board of Directors approved guidelines for adjustments to the terms and conditions of the Judicial Reorganization Plan and the Plan Support Agreement (“PSA”) of Oi and its subsidiaries filed before the 7
th
Corporate Court of the District of the Capital of the State of Rio de Janeiro, before which the Judicial Reorganization is pending. The approved adjustments contemplate some of the adjustments that were being defended by the Company’s Board of Executive Officers so that the Plan reaches a configuration that allows the evolution of the negotiations to a new level. The Company incorporated into the Plan and PSA the adjustments approved by the Board of Directors and filed the New Versions of the Plan and the PSA in the Courts, ANATEL and the Brazilian Securities and Exchange Commission (CVM).
On November 27, 2017, pursuant to Article 157, Paragraph 4, of Law No. 6,404/76 and under CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that, given the approval by the Board of Directors of the Company at a meeting held on November 11, 2017, of guidelines for adjustments to the terms and conditions of the Judicial Reorganization Plan and the Plan Support Agreement (PSA) of Oi and its subsidiaries, submitted with the 7
th
Corporate Court of the Judicial District of the Capital of Rio de Janeiro, where the Judicial Reorganization is pending, new changed versions of the Judicial Reorganization Plan and the PSA were filed today, incorporating the approved changes, which will be submitted to the General Creditors Meeting to be held on December 7, 2017, at 11:00 am, for the first call.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=CD1805CE-1F16-4401-AF58-5CC7A84807D9
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=E385C8A2-A61D-4AD8-82C0-B47C48577A8E
Anatel Precautionary Measure
On November 27, 2017, pursuant to Article 157, Paragraph 4, of Law No. 6,404/76 (“Brazilian Corporation Law”) and under CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that, on this date, Oi became aware of a decision of the Directors’ Council of the National Telecommunications Agency (“Anatel”), that, through Judgment No. 601, issued today, orders Oi, among other matters, the following:
“a.i) not to execute the contract that supports the Judicial Reorganization Plan under the terms of the draft submitted to the Agency;
a.ii) to refrain from entering into any contract that supports the Judicial Reorganization Plan, or to execute similar documents containing clauses identical or analogous to those expressly mentioned in this analysis, given that they could harm the interests of the company and the community;
a.iii) to keep sending notice to the Competition Superintendence about the meetings of the Board of Directors and of the Board of Executive Officers, on the same date as they convene;
a.iv) if the Superintendence of Competition deems it worthwhile and convenient to send a representative to attend the meetings referred to in item “a.iii”, that the representative is given access to all relevant documents, if the Superintendence of Competition deems it worthwhile and convenient to send a representative to attend the meetings referred to in item “a.iii”, that the representative is given access to all relevant documents, so that the representative can immediately inform the Directors’ Council of Anatel of any acts or facts relevant to the maintenance of the concession and compliance with fiduciary duties by the company’s managers;
a.v) that failure to comply with the above will lead to the application of applicable sanctions to Oi S.A. and, if applicable, also to the members of the Board of Directors or Executive Officers who sign any contract that supports the Judicial Reorganization Plan, or any similar document.”.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=8A896644-9883-424B-AB76-F352871CA141
Decision about the Judicial Reorganization Plan and the General Meeting of Creditors
On November 29, 2017, in compliance with Article 157, paragraph 4, of Law No. 6,404/76 and pursuant to CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that on this date it received notice of the decision of the 7
th
Corporate Court of the District of the Judicial District of the Capital of the State of Rio de Janeiro, before which it handles the Judicial Reorganization that it reexamined requests from certain creditors of the Company, and determined the following:
“1) Denied the requests for the suspension of the voting rights of the members of the Board of Directors of Oi S/A and the minority shareholders in the petition of pages. 241,856/241,984 (items ii and iii) and the petition on pages. 243,730/243,751 (items i, ii and iv);
2) Regarding the request to prohibit the signing of the Plan Support Agreement negotiated by the minority shareholders, it was clarified that ANATEL has already prohibited such signing; furthermore, it is not for the Court to assess the merits of the reorganization plan;
3) Maintained the precautionary decision that determined that the new Directors appointed by the Board of Directors, refrain from interfering in any way with matters related to this judicial reorganization process, as well as negotiating and drawing up the judicial reorganization plan, matters that will remain in the exclusive jurisdiction of Oi Group’s CEO, under the penalties of civil and criminal law.
4) Appointed Oi Group’s current CEO, Eurico Teles, as the person in charge of conducting and concluding negotiations with the creditors of this reorganization until on which date he must personally present to this magistrate the reorganization plan that will be vote on in the General Creditors Meeting (GCM), regardless of approval by the Board of Directors.
5) Denied for the time being, the request of the Judicial Administrator to submit alternative plans to the General Creditors Meeting if any, that are submitted by relevant creditors.
6) As a consequence of the measure adopted here the postponement of the ACG is again required, rescheduling the first call of the General Creditors Meeting for December, 17, 2017 at 11:00 a.m., which may continue on December 20, 2017, if necessary. The second call remains unchanged, which is on February 1, 2018, at 11:00 a.m., and can continue on February 2, 2018.
7) Denied in part the decision that determined the presentation of the reorganization plan to the Board 10 days in advance of the GCM. The plan must be presented by the CEO, in court, on December 12, 2017 and the GCM will take place on December 19, 2017.
On December 12, 2017, pursuant to Article 157, Paragraph 4, of Law No. 6,404/76 and CVM Instruction No. 358/02, and in compliance with the judgement rendered on the same date by the 7
th
Corporate Court of the Judicial District of the Capital of Rio de Janeiro, where the Judicial Reorganization of Oi and its subsidiaries, the Company informed its shareholders and the market in general that a new version of the Judicial Reorganization Plan, with amendments, was filed with the abovementioned
Court on this date, and will be submitted to the General Creditors Meeting to be held on December 19, 2017, at 11:00 am, for the first call.
On this date, a group of bondholders confirmed to the Company that they are willing to promptly provide or arrange firm commitments for the purpose of fully backstopping the R$4.0 billion capital increase provided for in the Plan, pursuant to the conditions to be set forth in contracts to be negotiated and executed in good faith among those creditors and the Company before the General Meeting of Creditors.
On December 20, 2017, pursuant to Article 157, paragraph 4 of Law 6404/76, under CVM Instruction 358/02, the Company informed its shareholders and the market in general that, on this date, the creditors of the Company and its subsidiaries, in the General Creditors Meeting, approved the Judicial Reorganization Plan, including negotiated changes, pursuant to Article 45 of Law No. 11,101/2005. The Plan will be submitted for approval to the 7
th
Corporate Court of the District of the Capital of Rio de Janeiro, under the terms of the law.
On December 22, 2017, regarding the approval of the judicial reorganization plan of Oi and its subsidiaries during the General Creditors Meeting installed on December 19, 2017, the Company informed its shareholders and the market in general that the Plan and its exhibits, as well as the minutes of the GCM that approved the Plan were filed by the Judicial Administrator with the 7
th
Corporate Court of the District of the Capital of Rio de Janeiro, where the judicial reorganization is pending, on this date.
On January 8, 2018, pursuant to Article 157, paragraph 4 of Law No. 6.404/76, under CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that, on this date, the Judge of the 7
th
Corporate Court of the Capital District of the State of Rio de Janeiro granted the judicial reorganization of the Company and its subsidiaries and ratified the Judicial Reorganization Plan with some exceptions emphasized in the original document. The decision also addressed the call for an Extraordinary General Shareholders Meeting to deliberate on matters that impact the Plan.
On January 15, 2018, the Company informed its shareholders and the market in general that, on January 12, 2018, it was made aware of the decision of the Board of Directors of the National Telecommunications Agency (Conselho Diretor da Agência Nacional de Telecomunicações – ANATEL), with respect to the request from Oi for prior consent for the inauguration of the new members of the Transitional Board of Directors, pursuant to the judicial reorganization plan approved in the General Creditors Meeting and ratified by the 7
th
Corporate Court of the Capital of the State of Rio de Janeiro. Anatel’s analysis is restricted exclusively to the request for prior consent for the composition of such Board, under the terms and conditions set forth in Section 9.2 of the Plan.
On February 5, 2018, the Company informed its shareholders and the market in general that the decision rendered by the 7th Corporate Court of the Judicial District of the Capital of the State of Rio de Janeiro confirming the Judicial Reorganization Plan of the Company and its subsidiaries and granting the judicial reorganization of the Recovering Entities was published on this date. As a result of the publication of the decision, the period of 20 days for the creditors of the Recovering Entities can choose between the options for payment of their respective credits, as provided in the Plan, will begin from 00:00 on February 6, 2018 until 23:59 on February 26, 2018.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=A3C23F5F-6756-4B31-A8F1-795B0CC51436
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=9B7322F9-D5A1-409C-BD30-8B1A48E34F25
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=8C66F005-1F41-448A-A80E-D62F72160E28
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=94B29338-5A2A-4A0E-9279-A0BF07F31902
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=5ED127CB-EE61-4377-A73A-BE6C41D46E78
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=AC1A4262-33E3-43CF-816A-017378062EBA
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=D43972EF-B201-4C12-B6C0-90856FA73F7B
Decision of American Court concerning the Chapter 15 of the US Bankruptcy Code
On December 5, 2017, pursuant to Article 157, paragraph 4, of Law No. 6,404/76 and CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that on December 4, 2017 the Judge of the Bankruptcy Court for the Southern District of New York issued a ruling denying the motion of Mr. Jasper Berkenbosch (Judicial Administrator in the Netherlands for Oi Brasil Holdings Coöperatief U.A. – In Judicial Reorganization – “Oi Coop”) to revoke the current ruling issued under Chapter 15 of the US Bankruptcy Code (“Chapter 15”) proceeding of Oi Brasil Holdings Coöperatief UA – In Judicial Reorganization (“Oi Coop”), and to recognize Oi Coop’s bankruptcy proceedings in the Netherlands as its foreign main proceeding, maintaining the recognition by that Court of the judicial reorganization proceeding, presently ongoing in the 7th Corporate Court of the Judicial District of the State of Rio de Janeiro, Brazil, as its foreign main proceeding.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=99A48F21-BA2F-4776-8B7C-DCDE712B9934
Restructuring Settlement Negotiations and Discussions
On December 13, 2017, in compliance with Article 157, paragraph 4 of Law 6,404/76 and pursuant to CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that, the Company has been involved in discussions with, provided certain information to, and has come to an agreement in principle with certain holders of, or managers of entities holding, beneficial interests in Notes.
Additionally, on December 13, 2017 too, in compliance with Article 157, paragraph 4 of Law 6,404/76 and pursuant to CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that the Company has been involved in discussions and negotiations with certain individual holders of, or managers of entities holding, beneficial interests in. For the avoidance of doubt, the “Noteholders,” as such term is used in this second Material Fact, do not include any holders of the Notes that are members of the Steering Committee of the International Bondholder Committee or the Steering Committee of the Ad Hoc Group of Bondholders.
On December 20, 2017, in compliance with Article 157, paragraph 4 of Law 6,404/76 and pursuant to CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that, the Company has held a meeting with and been involved in discussions and negotiations regarding the form, terms and provisions of a subscription and commitment agreement and certain proposed amendments to the plan of reorganization filed by the Company on December 12, 2017 on the docket of the judicial reorganization proceedings pending in respect of the Company in Brazil, and provided certain information to certain individual holders and certain groups of holders of, or managers of entities holding beneficial interests in Notes, and has entered into a subscription and commitment agreement with creditors and in particular the Individual Noteholders, the Noteholders who are members of the Steering Committee of the Ad Hoc Group of Bondholders , and certain of the Noteholders who are members of the International Bondholder Committee.
About the Confidentiality Agreements with Members of the Steering Committee of the International Bondholder Committee and the Steering Committee of the Ad Hoc Group of Bondholders:
On November 7, 2017, the Company executed confidentiality agreements with the Noteholders who are members of the Steering Committee of the International Bondholder Committee and with certain Noteholders that are members of the Steering Committee of the Ad Hoc Group of Bondholders and, on November 22, 2017, and together with the November 7 Confidentiality Agreement, with certain other Noteholders that are members of the Steering Committee of the AHG, to facilitate further discussions concerning the Company’s capital structure and potential alternatives for a proposed restructuring of, and capital infusion by means of a capital increase into, the Company. Pursuant to the IBC/AHG Confidentiality Agreements, the Company agreed to disclose publicly, after the expiration of a period set forth in the IBC/AHG Confidentiality Agreements, certain information regarding, or shared in connection with, the discussions that have taken place between the Company, the IBC and the AHG concerning a Potential Transaction. The information included in this press release and certain documents posted on the Company’s website referenced herein are being furnished to satisfy the Company’s public disclosure obligations under the IBC/AHG Confidentiality Agreements. The IBC/AHG Confidentiality Agreements have terminated in accordance with their terms, except as otherwise provided therein.
About the Confidentiality Agreements:
The Company executed confidentiality agreements with each Noteholder to facilitate discussions and negotiations concerning the Company’s capital structure and potential alternatives for a proposed restructuring of, and capital infusion by means of a capital increase into, the Company on terms similar to those contemplated by the draft term sheet and plan support agreement filed with the Brazilian bankruptcy court on November 6, 2017 subject to certain modifications. The information included in this press release is being furnished to satisfy the Company’s public disclosure obligations under the Confidentiality Agreements. The Confidentiality Agreements have terminated in accordance with their terms, except as otherwise provided therein.
About the Confidentiality Agreements:
The Company executed confidentiality agreements prior to the date hereof with certain Noteholders who are members of the IBC and with the Noteholders that are members of the Steering Committee of the AHG, and with certain individual noteholders who are not known by the Company to be members of the IBC or AHG to facilitate further discussions and negotiations regarding the form, terms and provisions of a subscription and commitment agreement and certain proposed amendments to the December 12 Version of the Plan in connection with the agreement in principle on the material terms of a proposed restructuring of, and capital infusion by means of a capital increase into the Company, between the Company he IBC and the AHG previously announced by the Company in one of its press releases made on December 13, 2017 and disclosed in connection therewith.
Pursuant to the Confidentiality Agreements, the Company agreed to disclose publicly, after the expiration of a period set forth in the Confidentiality Agreements, certain information regarding, or shared in connection with, the discussions and negotiations that have taken place between the Company and each Individual Noteholder, and among the Company, the IBC and the AHG, in each case, concerning a Potential Transaction.
About the Meetings with the IBC/AHG Representatives and Individual Noteholder Representatives:
Since execution of the Confidentiality Agreements, certain representatives of the Company and the Company’s financial and legal advisors met by videoconference and teleconference with all the groups that was involved on the discussions, to in each case to discuss and negotiate the form, terms and provisions of a subscription and commitment agreement and certain proposed amendments to the December 12 Version of the Plan in connection therewith.
About the Agreement Regarding the Terms of a Potential Transaction:
The Company, the IBC and the AHG have agreed in principle on the material economic terms of a Potential Transaction to be effectuated under and pursuant to the plan of reorganization and other relevant supporting documents, in each case subject to (i) the review and approval by the IBC and the AHG of all of the actual terms of the Amended Plan, (ii) agreement on other related terms including, without limitation, mechanics of new money capital increase and backstop provisions and (iii) completion of definitive documentation.
The plan filed by the Company on December 12, 2017 may be further amended to fully reflect the terms and conditions set forth in the Agreed Principal Terms Presentation as well as other related matters.
About the Discussions with the Noteholders:
On November 16, 2017 and November 27, 2017, representatives of the Company and the Company’s financial and legal advisors met in person or by phone with representatives of each Noteholder and each Noteholder’s respective legal advisors to discuss the terms of a Potential Transaction. On November 27, 2017, the Company filed a draft term sheet and plan support agreement regarding the terms of a Potential Transaction with the Brazilian bankruptcy court. The November 27 Term Sheet and PSA made certain modifications to the November 6 Materials to reflect the Company’s understanding of the oral proposals discussed at the November 16 and November 27 meetings.
On November 29, 2017, the Company Representatives and the Noteholder Representatives met in person to discuss feedback on the November 27 Term Sheet and PSA received by the Noteholders Representatives in meetings with various stakeholders of the judicial restructuring process of the Company, including Anatel, Banco do Brasil, Banco Nacional do Desenvolvimento Econômico e Social, Itaú Unibanco S.A. and the Advocacia-Geral da União (AGU) and discussed the terms included on the Material Fact released on December 13, 2017 that treated the negotiations with individuals Noteholders.
The November 29 Meeting was adjourned at the direction of a member of the Board of Directors of the Company on the basis that the Company Representatives should not negotiate any changes to the November 27 Term sheet and PSA.
On December 8, 2017, the Company Representatives and the Noteholder Representatives had a videoconference where the Company Representatives have explained upcoming changes to the “bondholder option” in the Judicial Restructuring Plan of the Company that was mentioned in the Material Fact released on December 13, 2017 that treated the negotiations with individuals Noteholders.
The Company informed that it would present the new draft of the Judicial Restructuring Plan to the Brazilian bankruptcy court on December 12, 2017, regardless of any plan support agreement, or any other form of expression of support by bondholders.
While negotiations between the Company and each Noteholder may continue in the future, there can be no assurance that negotiations will continue or if they do continue, that they will result in an agreement regarding the terms of a Potential Transaction.
About the Agreement Regarding the Agreed Commitment Agreement with Certain Noteholders:
The Company has entered into the Agreed Commitment Agreement with certain of the Noteholders who are members of the IBC, the Noteholders who are members of the Steering Committee of the AHG, and the Individual Noteholders, pursuant to which, among other things, the Investors will agree to backstop a BRL 4 billion capital raise on the terms and subject to the conditions in the Agreed Commitment Agreement.
About the Confidential Information:
During the term of the IBC/AHG Confidentiality Agreements, certain representatives of the Company and the Company’s financial and legal advisors provided to certain representatives of the IBC, the AHG, advisors to certain export credit agencies that hold Class III Claims, and the IBC’s and the AHG’s respective financial and legal advisors the following written materials, which was detailed in the Material Fact released on December 13, 2017 and, in addition to the Cleansing Materials released, the Company Representatives and the IBC/AHG/ECA Representatives shared orally certain other Confidential Information, that was detailed on the Material Fact released on December 13, 2017.
Relative of the Material Fact release on December 20, 2017, the Company informed in addition to the Agreed Commitment Agreement, the Company Representatives provided to the IBC/AHG Representatives cash flow projections reflecting the treatment of the Anatel and AGU claims reflected in the Approved Plan annexed to the Agreed Commitment Agreement. In addition, the Company Representatives shared orally certain other Confidential Information. Specifically, the Company Representatives indicated that the interest rate for the BNDES debt would remain the same as in the plan and that the collateral package would be the same as in the plan, consisting of a pool of receivables in an amount equal to 6x the amount of the largest amortization installment. The Company Representatives also indicated that the new BNDES debt under the plan would include certain financial covenants for BNDES.
About Certain Other Important Information:
In addition to the disclaimers and qualifiers set forth in the materials themselves, all statements made in the Cleansing Materials are in the nature of settlement discussions and compromise, are not intended to be and do not constitute representations of any fact or admissions of any liability and are for the purpose of attempting to reach a consensual compromise and settlement. Nothing contained in the Cleansing Materials is intended to or shall be construed to be an admission or a waiver of any rights, remedies, claims, causes of action or defenses. The information contained in the Cleansing Materials, and, in particular, the Agreed Principal Terms Presentation, is for discussion purposes only and does not constitute a
commitment to consummate any transaction, or otherwise take any decisions or actions contemplated in the Cleansing Materials. Consummation of the Potential Transaction on the terms and conditions set forth in the Agreed Principal Terms Presentation is subject in all respects to definitive documentation regarding the same.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=BAA9B067-04ED-4A45-8D86-E9C9E9D4BC35
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=C3F2955A-AD13-4333-A319-D2DBA1C9B1A6
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=F57138F8-508B-4653-B29A-F03642B589BD
Request to Call Extraordinary General Shareholders’ Meeting
On December 29, 2017, in compliance with Article 157, §4 of Law No. 6,404/76, the Company informed its shareholders and the market in general that on December 28, 2017 the shareholder BRATEL S.À.R.L, requested, pursuant to Article 123, sole paragraph, sub-paragraph c of the Brazilian Corporation Law, that the Board of Directors convene an Extraordinary General Shareholders’ Meeting within eight days to deliberate on matters that impact the Judicial Reorganization Plan of the Company and its subsidiaries, approved at the General Meeting of Creditors commenced on December 19, 2017 and concluded on December 20, 2017 and filed before the 7
th
Corporate Court of the Judicial District of the State Capital of Rio de Janeiro, where the judicial reorganization process is underway, with the agenda described on the same Material Fact. Considering that the subject matters of the agenda indicated in the request for convening an Extraordinary General Shareholders’ Meeting are related to the judicial reorganization of the Company and other Companies Under Reorganization, and consequently the Reorganization Plan approved by the creditors in the General Creditors Meeting, the Company will submit the request for an Extraordinary General Shareholders’ Meeting for the approval of the Reorganization Court which shall decide on the legality and convenience of convening and holding the Extraordinary General Shareholders’ Meeting of the Company requested by BRATEL S.Á.R.L..
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=A9EC8F64-3C12-4032-9238-0A7BB0E55FF1
Decision about Extraordinary General Meeting
On February 06, 2018, the Company informed to its shareholders and the market in general that it learned, of a judgement rendered by the 7
th
Corporate Court of the Judicial District of the Capital of the State of Rio de Janeiro rejecting the shareholder Bratel S.A.R.L.’s request to partially reconsider the decision which confirmed the judicial reorganization plan and fully upholding such decision, including with respect to not holding the Extraordinary General Meeting convened by Bratel S.A.R.L. for February 7, 2018.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=85889F1C-D4B3-415B-8A5B-508DD7292AB8
Clarifications on the Extraordinary General Meeting requested by Bratel S.À.R.L.
On February 7, 2018, in accordance with the provisions set forth in Article 157, paragraph 4 of Law No. 6.404/76, as well as CVM Instruction No. 358/02, the Company informed s its shareholders and the market in general that on this date, the 7
th
Corporate Court of the Capital of the State of Rio de Janeiro, after considering the claims of the Company regarding the initiatives undertaken by Bratel S.A.R.L., which insisted on convening the General Meeting called for February 7, 2018, declared invalid and ineffective any out-of-court deliberation that undermines matters already approved by the Plan, according the terms cited on the Material Fact. The Company also informs that, on this date, disregarding a succession of judicial decisions, a group of shareholders attempted to hold a General Meeting to deliberate on matters related to provisions set forth in the approved and confirmed Plan. The Company does not recognize the legality of such act and will undertake the appropriate judicial, administrative and criminal actions.
On February 08, 2018, in compliance with Article 157, paragraph 4 of Law No. 6,404/76, pursuant to CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that on this date, it became aware of the judgement passed by the 7
th
Corporate Court of the Judicial District of the Capital of Rio de Janeiro which granted the interlocutory relief requested by the Company to stop the effects of all resolutions taken at the purported Extraordinary General Meeting held
between a group of shareholders of the Company, on February 07, 2018, and further ordered the subpoena of the Company Registry of the State of Rio de Janeiro and of the Brazilian Securities and Exchange Commission so that they refrain from filling the minutes of such Meeting, or in the event they have already done so, to suspend such filings until further judicial order by the Judicial Reorganization Court, pursuant the terms in the Material Fact.
On March 7, 2018, pursuant to Article 157, paragraph 4 of Law 6404/76 and CVM Instruction 358/02, the Company informed its shareholders and the market in general that, on this date, it became aware of the decision of the 7
th
Corporate Court of the Capital of Rio de Janeiro, which, accepting the opinion of the Public Prosecutor's Office, suspended the voting rights of the undersigned individuals of the minutes of the Extraordinary General Shareholders Meeting held on February 7, 2018, with the exception of those who abstained from voting, and ordered the removal of the members of the Board of Directors elected/indicated by them until the occurrence of the capital increase provided for in the Company’s judicial reorganization plan.
Due to this decision, some shareholders had their rights suspended and, consequently, the members of the Board of Directors elected/indicated by them are removed from their positions.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=E57052D9-CC06-4FFF-9C80-DA9DBB752E65
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=CC25EEA0-90DF-487C-A300-CB34E3260471
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=7CD79402-832E-4169-8A24-D7C672132B9E
Recovery Election Solicitation to the Holders of Bonds
On February 14, 2018, the Company announced, in this date, that they have amended the terms of the solicitations of recovery elections relating to recoveries under the consolidated judicial reorganization plan applicable to Notes,
explicit on the document released by the Company.
The amendment provides that Bondholders that have previously individualized their Bondholder Credits in order to participate in the Small Creditor Program will not be required to separately individualize their Bondholder Credits in accordance with the procedure established by the Bondholder Decision. The procedures applicable to Bondholders that have not individualized their Bondholder Credits in order to participate in the Small Creditor Program remain unchanged. The amended terms and conditions of the Recovery Election Solicitations are described in the Amended and Restated Information and Election Solicitation Statement, dated February 14, 2018, and the accompanying exhibits. Each Recovery Election Solicitation has expired at 11:59 p.m., Brasilia time, on February 26, 2018.
According to the Judicial Reorganization Plan, only Bondholders that are Eligible Bondholders as a result of having individualized Bondholder Credits are permitted to elect the form of recovery that they will receive under the RJ Plan. A Bondholder that is the beneficial owner of Bondholder Credits in excess of R$50,000 will be deemed to have individualized Bondholder Credits if such Bondholder has individualized Bonds before the Judicial Reorganization Court in accordance with the procedure established by the Judicial Reorganization Court in the Bondholder Decision regarding the procedure and documentation required to be submitted for the purposes of individualized exercise of the right of petition, voice and vote at the GCM; or such Bondholder has individualized Bonds before Oi or the Judicial Administrator in accordance with the Small Creditor Program Procedures, as evidenced by the document.
A beneficial owner of Bondholder Credits of R$50,000 or less that did not participate in the Small Creditor Program may individualize its Bondholder Credits by providing a Small Bondholder Proof of Holdings directly to Oi together with a Small Bondholder Payment Option Notice in accordance with the specific procedures.
Bondholders that are not deemed to be Eligible Bondholders will NOT be entitled to make a Recovery Election. Any Bondholder that was the beneficial owner of an aggregate amount of Bondholder Credits of more than R$50,000, did not individualize Bonds before the Judicial Reorganization Court in accordance with the procedure established in the Bondholder Decision, or before Oi or the Judicial Administrator in accordance with the Small Creditor Program Procedures and, would like
to make a Recovery Election must take steps to petition the RJ Court to individualize its Bondholder Credits at or before the Election Deadline in sufficient time to be able to submit a valid Recovery Election. Only Eligible Bondholders would be entitled to make a valid Recovery Election. A Bondholder that is not an Eligible Bondholders will only be entitled to receive the Default Recovery with respect to its Bondholders Credits.
The procedures that an Eligible Bondholder must follow to make a valid Recovery Election depend on whether an Eligible Bondholder is a Verified Bondholder or a Small Bondholder.
On February 27, 2018, the Company informed ts shareholders and the market in general that the period for the creditors of the Company and its subsidiaries to choose among the payment options for the recovery of their respective credits under the Judicial Reorganization Plan of the Entities Under Reorganization expired at the end of the day on February 26, 2018. In respect solely to the bondholders, the Company informs that it learned of a judgement rendered by the 7
th
Corporate Court of the Judicial District of the Capital of the State of Rio de Janeiro, which, among other determinations, decided:
“In light of the trustees’ omission and the prejudice that it led to, I hereby determine, in favor of the bondholders, who were helpless at the moment, the extension of the deadline to exercise the payment option. Therefore, the bondholders who wish to individualize their credits (by filing a petition in the case records and subsequent choice through the electronic platform) may do so until March 8, 2018.”
On March 9, 2018, the Company informed its shareholders and the market in general that the period for the bondholders of the Company and its subsidiaries to choose among the payment options for the recovery of their respective credits under the Judicial Reorganization Plan of the Entities Under Reorganization, which had been postponed by 7
th
Corporate Court of the Judicial District of the Capital of the State of Rio de Janeiro on February 26, 2018, expired at the end of the day on March 8, 2018.
The Company reiterates that, as provided in a document previously released, persons that acquire beneficial interests in any bonds issued or guaranteed by the Company after March 8, 2018 will not be entitled to elect the form of recovery with respect to the acquired bonds, but will only be entitled to receive the default recovery described in the Plan with respect to those bonds, unless the transferor and transferee of such bonds have strictly complied with the provisions for the assignment of a recovery election described in the Statement.
Oi further reiterates that in order for a recovery election made by a Qualified Investor to be valid, the Qualified Investor must, at or prior to 5:00 p.m., New York City time, on March 15, 2018, provide a proof of holdings of the beneficial interests in all bonds of each series held by such Qualified Investor as of 11:59 p.m. Brasilia time on March 8, 2018 through the procedures described in the Statement. Lastly, the Company informed that, together with its advisors and the institutions it has engaged, it will determine whether beneficial holders of bonds issued or guaranteed by the Company have made valid recovery elections pursuant to the Plan.
On March 16, 2018, pursuant to Article 157, Paragraph 4 of Law No. 6,404/76, pursuant to CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that it has received a preliminary indication, subject to confirmation and documentary evidence, of the results of the recovery elections made by the bondholders of the Company and its subsidiaries with respect to their respective credits, as provided for in the Judicial Reorganization Plan of the Recovering Entities.
Pursuant to this preliminary result, it appears Qualified Bondholders holding bonds in the aggregate principal amount of US$ 8,017,620,999.17 (or the equivalent in reais or euros) have made recovery elections with respect to the credits represented by their respective bonds as provided in Clauses 4.3.3.2 et seq. of the Plan. The potential dilution for existing shareholders resulting from the future distribution of PTIF Shares and the future issuance of new common shares and subscription warrants, in the context of the capital increase approved at the Board of Directors’ meeting held on March 5, 2018, would be approximately 71%. This percentage is subject to (i) the results of an Exchange Offer to be made to those Qualified Bondholders who have made valid recovery elections upon the satisfaction or waiver of certain conditions set forth in the Plan, and (ii) the results of the exercise of the preemptive rights by Oi’s current shareholders, and assumes that all such credits will
be paid pursuant to Clause 4.3.3.2 of the Plan and that all bonds with respect to which valid recovery elections have been made are surrendered in the Exchange Offer.
On April 11, pursuant to Article 157, Paragraph 4, of Law No. 6,404/76 and to CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that it received on this date the final results of the recovery elections made by the Qualified Bondholders of the Company and its subsidiaries with respect to their respective credits, as provided for in the Judicial Reorganization Plan of the Recovering Entities.
Pursuant to these results, the total dilution for existing shareholders resulting from the delivery of the package of financial instruments set forth in the aforementioned Clause of the Plan, in the context of the capital increase approved at the Board of Directors’ meeting held on March 5, 2018, will be 72.12% in case all the Qualified Bondholders take the necessary steps to participate in the Exchange Offer to be made to those Qualified Bondholders who have made valid recovery elections upon the satisfaction or waiver of certain conditions set forth in the Plan.
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Approval of a Capital Increase for the Capitalization of Credits
On March 5, 2018, pursuant to Article 157, Paragraph 4, of Law No. 6.404/76 and under the terms of CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that on this date, the Board of Directors approved the conditions for the Company’s capital increase through the capitalization of part of the Unsecured Credits of the Qualified Bondholders, with the issuance of new common shares and subscription warrants that will be allocated to the subscribers of the shares that are the object of the increase, as provided in Clauses 4.3.3.2 and 4.3.3.5 of the Judicial Reorganization Plan of Oi and its subsidiaries, as approved by the General Creditors Meeting and ratified by the Judicial Reorganization Court.
The Capitalization of Credits was approved by the Board of Directors within the limits of the authorized capital provided for in the Company’s Bylaws, and will be carried out through an issuance of new common shares with conditions described in the document. The total number of common shares and subscription warrants to be emitted in the Capitalization of Credits will depend on the result of (i) the payment option election process of the Qualified Bondholders and (ii) the Exchange Offer to be made to the Qualified Bondholders that opted for that respective payment option.
The capital increase resulting from the Capitalization of Credits is subject to the preemptive rights of Oi’s current shareholders, pursuant to Article 171, Paragraph 2, of Law No. 6.404/76, which can be exercised within a period of a minimum of 30 calendar days. Should the shareholders’ preemptive rights be exercised, in cash, the number of shares to be subscribed by the Qualified Bondholders will be reduced by the corresponding amount and the amount paid in the exercise of such right will be delivered to the holders of the capitalized credits pro rata to the claims they hold.
In the Capitalization of Credits, a number of subscription warrants will also be issued by Oi, within the limit of the authorized capital, which will be allocated to the subscribers of the shares that are the object of the capital increase and each subscription warrant will entitle its holder to subscribe to one of the Company’s common shares.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=D9EB0E1F-E35E-4225-B5AB-DCE799264244
Arbitration Proceeding
On March 6, 2018, pursuant to Article 157, Paragraph 4, of Law No. 6.404/76 and under the terms of CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that it has acknowledged the statement issued by the
Emergency Arbitrator under the arbitration proceedings filed against the Company by shareholder Bratel S.À.R.L. with the Market Arbitration Chamber to address issues related to the implementation of the Judicial Reorganization Plan ratified by the reorganization Court. Such statement was issued without the Company being heard or having been granted the opportunity to offer its arguments, and the Company was granted with a 48-hour deadline to provide information and reply to Bratel’s claims.
The Company believes that, by imposing illegal obstacles to the implementation of the capital increase of the Company provided for under the Plan, such arbitration proceeding conflicts with the resolution taken by the General Meeting of Creditors which approved the Plan, the judgement which ratified it, as well as other decisions taken by the Judicial Reorganization Court, the sole Court of competent jurisdiction to decide on the matter at issue, as also ratified by the Superior Court of Justice
On March 14, 2018, in compliance with Article 157, Paragraph 4 of Law No. 6,404/76, pursuant to CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that, on March 13, 2018, it became aware of a judgement passed by Minister Marco Buzzi, of the Second Section of the Brazilian Superior Court of Justice, which granted the conflict of jurisdiction injunction requested by the Company and suspended the effects of the decision rendered by the arbitral court in the arbitral proceeding initiated by Bratel S.À.R.L. against the Company, as well as designated the 7th Corporate Court of the Judicial District of the Capital of Rio de Janeiro to decide upon any urgent matters, on a temporary basis, until further deliberation of that rapporteur.
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Consent Solicitations of PTIF and Oi Coop
On April 10, 2018, the Company informed its shareholders and the market in general that, in connection with the implementation of the RJ Plan, the Dutch Courts scheduled the dates for the verification meetings of the Dutch composition plans of PTIF and Oi Coop, both to be held on June 1, 2018. As a result, solicitations have been commenced with the intention of ensuring European recognition for the RJ Plan (the “Consent Solicitations”), as applicable to some Notes
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=B2F7BE49-41A2-4624-8962-440FF7F2F469
OTHER SUBJECTS
Additional Cure Period Granted by the NYSE for Oi to File Annual Report on Form 20-F
On November 21, 2017, the Company informed its shareholders and the market in general that it has received a notice from the New York Stock Exchange granting the Company’s request for an additional six-month period during which the Company may file its Annual Report on Form 20-F for the fiscal year ended December 31, 2016 with the U.S. Securities and Exchange Commission. As stated in the Company’s Material Fact dated May 17, 2017, the original cure period expired on November 17, 2017, as of which date the Company continued to be unable to complete the preparation of its financial statements in accordance with U.S. generally accepted accounting principles and, therefore, to file the 2016 Annual Report. The Additional Cure Period will expire on May 17, 2018 and the NYSE will continue to monitor the Company and may suspend trading of Oi’s securities prior to the end of the Additional Cure Period if any material adverse development occurs.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=20D35282-26FB-402E-B67E-FF2322F55C6A
Resignation of Chief Executive Officer
On November 24, 2017, in compliance with Article 157, paragraph 4, of Law No. 6,404/76 and pursuant to CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that on this date Mr. Marco Norci Schroeder presented his resignation as Chief Executive Officer of the Company. Pursuant to Article 37 of the Company’s Bylaws, the Board of Executive Officers, at a meeting held on this date, appointed Mr. Eurico de Jesus Teles Neto to act as interim Chief
Executive Officer, concurrently with his present position as Chief Legal Officer, until such time as the Board of Directors deliberates on this matter.
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Appointment of Chief Executive Officer
On November 27, 2017, in compliance with Article 157, paragraph 4, of Law No. 6,404/76 and pursuant to CVM Instruction No. 358/02, the Company informed its shareholders and the market in general that the Board of Directors of the Company unanimously elected Mr. Eurico de Jesus Teles Neto as Chief Executive Officer, for the remainder of the term, to be occupied concurrently with his position as Chief Legal Officer.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=EA080A9A-9773-4EF5-B848-36BDC249915B
Signature of a Memorandum of Understanding
On February 27, 2018, the Company informed its shareholders and to the market in general that it has signed, on February 26, 2018, a Memorandum of Understanding (MOU) with TIM Participações S.A., which unveils a key step of the negotiations to ponder on their respective disputes and unlocks a new cycle of the plan to share the infrastructure, in line with the partnerships already implemented in the current Brazilian telecommunication market.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=F1E62467-E0A5-4088-BAFF-4DEC77B008EF
Merger of Oi Internet into Oi Móvel
On March 1, 2018, the Company informed its shareholders and the market in general that, on this date, Oi Internet S.A. merged into Oi Móvel S.A. – In Judicial Reorganization, both of them indirect subsidiaries of the Company, in compliance with the provisions set out in clauses 3.1.6 and 7.1 of the Consolidated Judicial Reorganization Plan of the Company and its subsidiaries. The merger constitutes one of the stages of the corporate and equity restructuring process of the Recovering Entities expressly contemplated in the Plan, and its objective is to optimize operations and improve the results of the Recovering Entities and Oi’s other direct and indirect subsidiaries. In addition, the unification of the operations carried out by Oi Internet and Oi Móvel, by means of the consolidation of the activities performed by them, will bring considerable administrative, economic, and fiscal benefits, with the reduction of costs and with gains generated from synergies resulting in greater efficiency in providing services.
http://ri.oi.com.br/oi2012/web/download_arquivos.asp?id_arquivo=6B6BF82C-62BA-4676-9E47-635EB4E2AAAB
Approvals of modifications in the Company’s organizational structure
On March 7, 2018, in accordance with the provisions set forth in Article 157, paragraph 4 of Law No. 6.404/76, with CVM Instruction No. 358/02, the Company informed its shareholders and the market that, on a meeting held on this date, the Board of Directors approved modifications in the Company’s organizational structure, that involved confirming the election of Mr. Carlos Augusto Machado Pereira de Almeida Brandão for the position of Chief Financial Officer and Investors Relations Officer of the Company and Mr. João do Passo Vicente Ribeiro leaving from the position of Officer without specific designation. Also in such meeting Mr. Hélio Calixto da Silva presented a request to resign from the position of Officer without specific designation, which was accepted by the Board of Directors.
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S&P´s update on Oi´s credit rating
On March 22, 2018, the Company informed its shareholders and the market in general that Standard & Poor’s announced today its research update on the credit ratings attributed to the Company. S&P raised its global scale corporate credit ratings to CCC+ from D and its national scale ratings to brB from D. At the same time, S&P reaffirmed that all debt ratings remain at D,