NEW
YORK, July 2, 2024 /PRNewswire/ -- Oi S.A. –
Em Recuperação Judicial (the "Company") announced
the expiration of its rights offering previously announced on the
Launch of Restructuring Plan Subscription and Option Election
Process press release dated as of May 31,
2024 (the "Offers") made pursuant to that
certain rights offering memorandum dated May
31, 2024 (as amended or supplemented from time to time, the
"Offering Memorandum") and the Company's judicial
reorganization plan, declared effective by the RJ Court on
May 29, 2024 ("RJ Plan"). The
Offers expired at 5:00 p.m.,
New York time, on July 1, 2024 (the "Expiration Time").
Capitalized terms used but not otherwise defined herein shall have
the meaning ascribed to them in the Offering Memorandum.
Pursuant to the Offers, the Company's "Class III" financial
creditors holding U.S. denominated claims had the right to
either:
(a) subscribe for up to its applicable pro rata portion of
U.S.$505,000,000 aggregate principal
amount of the new 10.000% / 13.500% PIK Toggle Senior Secured Notes
due 2027 to be issued by the Company (the "New Priority
Notes"); and, upon the valid purchase of its proportional
allocation of New Priority Notes by such eligible creditor, its
existing claims shall be novated and replaced with (1) an
aggregate principal amount equal to the lesser of (x) the aggregate
amount of its existing claims and (y) an applicable pro rata
portion, of the U.S. Dollar equivalent amount of R$6.75 billion aggregate principal amount of the
Company's new 8.50% PIK Subordinated Secured Notes Units (the
"Roll-Up Notes"); and (2) an applicable residual portion of
common shares to be issued by the Company representing up to 80% of
the total capital stock of the Company (the "New Shares" and
together with the Roll-Up Notes, the "Option 1 Recovery");
or
(b) have its existing claims novated and replaced on a
dollar-for-dollar basis for new loans, consisting of (1) an
aggregate principal amount (equal to 8% of such eligible creditor's
existing claims) of Subordinated Loans due 2044 (the "2044
Loan") and (2) an aggregate principal amount (equal to 92% of
such eligible creditor's existing claims) of Subordinated Loans due
2050 (the "2050 Loan", and together with the 2044 Loan the
"Option 2 Recovery"); or
(c) receive an entitlement to a payout under the RJ Plan
as consideration for such eligible creditor's full amount of
existing claims (each, a "Payout Recovery") of one of the
following (1) solely in the case of a creditor holding no more than
R$5,000 (or US$988.79) of existing claims, a full cash payment of
such existing claims up to R$5,000 (or the equivalent amount
thereof); (2) solely in the case of a creditor holding more than
R$5,000 of existing claims, a cash payment of R$5,000 (or the
equivalent amount thereof) (and an automatic waiver of any amount
of existing claims in excess of R$5,000); (3) solely in the case of
a creditor holding existing claims under the NQB Facility and
holding no more than U.S.$10,000 of total existing claims, a full
cash payment of all of such creditor's existing claims up to
U.S.$10,000 on December 31, 2024; and (4) solely in the case of a
creditor holding existing claims under the NQB Facility and holding
more than U.S.$10,000 but no more than U.S.$20,000 of total
existing claims, a full cash payment of all of such creditor's
existing claims up to U.S.$20,000 on December 31, 2026.
Any Eligible Creditor (other than a DIP Roll Holder to the
extent of its applicable DIP Obligations) that validly elected to
subscribe for New Priority Notes pursuant to the Offers, is
required to fund the cash purchase price of such subscribed for New
Priority Notes such that such funds are received by the
Subscription Agent within two Business Days (and prior to
5:00 P.M., New York City time, on such second Business
Day) following receipt of e-mail confirmation of such eligible
creditor's subscription amount from the Subscription Agent, unless
extended by the Company in its sole discretion (such time and date,
as the same may be extended, the "Subscription Time"),
which Subscription Time shall for all such Eligible Creditors
shall be no later than 5:00 P.M.,
New York City time on July 8, 2024.
Pursuant to the RJ Plan, a (i) failure by a Creditor to make
a valid election in an Offer with respect to existing claims in
accordance with the terms of the Offers or (ii) any Creditor
who fails to fund (or, in the case of DIP Roll Holders, convert
pursuant to and subject to the conditions in the Note Purchase
Agreement) or whose funds are not timely received by the
Subscription Agent, will, in each case, result in such Creditor
have its existing claims automatically cancelled and novated
with a right to receive from the Company the payment in full of
such existing claims in five equal annual installments commencing
with the first installment on the last business day of December 2048 and continuing on each one-year
anniversary thereof (the "Default Recovery"). Such holders
shall receive an escrow CUSIP (P73ESCAA6) evidencing its
entitlement to the Default Recovery under the RJ Plan.
Concurrently with the Offers and pursuant to the RJ Plan, the
Company also offered to creditors holding "Class III" financial
credits denominated in Brazilian Reais, the right to (i) subscribe
for new priority securities (and receive the Option 1 Recovery) or
(ii) elect to receive the Option 2 Recovery or (iii) elect to
receive the Payout Recovery, on terms consistent with those set
forth in the Offering Memorandum. The subscription and election
process for such creditors was being run in Brazil via the online platform
https://credor.oi.com.br, and such process has also expired.
The Company's obligation to accept Subscriptions and/or existing
claims for novation and replacement is subject to, and conditioned
upon, the satisfaction or waiver of certain conditions set forth in
the RJ Plan and the Note Purchase Agreement. Subject to the
satisfaction or waiver of such conditions, the Company currently
expects that the settlement date will occur on July 15, 2024. However, no assurance can be given
that any such conditions will be satisfied or waived.
Neither the Offering Memorandum nor any related documents have
been filed with the U.S. Securities and Exchange Commission, nor
have any such documents been filed with or reviewed by any federal
or state securities commission or regulatory authority of any
country. No authority has passed upon the accuracy or adequacy of
the Offering Memorandum or any related documents, and it is
unlawful and may be a criminal offense to make any representation
to the contrary.
This press release does not constitute an offer to sell or
exchange, as applicable, or a solicitation of an offer to sell or
exchange, with respect to, the New Priority Notes, Option 1
Recovery, Option 2 Recovery or Payout Recovery. No offer,
solicitation, purchase, sale or exchange will be made in any
jurisdiction in which such an offer, solicitation, purchase, sale
or exchange would be unlawful. The Offers were made solely pursuant
to the Offering Memorandum and the RJ Plan and only to such persons
and in such jurisdictions as is permitted under applicable law.
Forward-Looking Statements
This press release contains forward-looking statements.
Statements that are not historical facts, including statements of
the Company's beliefs and expectations, business strategies, future
synergies, cost savings, future costs and future liquidity, are
considered forward-looking statements. The words "will", "shall",
"would", "should", "anticipates", "intends", "believes",
"estimates", "expects", "anticipates", "plans", "targets",
"purpose", "projects", "forecasts" and similar expressions, as they
relate to the Company or its management, are intended to identify
forward-looking statements. There is no guarantee that the expected
events, tendencies or expected results will actually occur. Such
statements reflect the current view of the Company's management and
are subject to various risks and uncertainties. These statements
are based on several assumptions and factors, including general
economic and market conditions, industry conditions, corporate
approvals, operating factors and other factors. Any changes in such
assumptions or factors could cause material differences between the
actual results and current expectations. All forward-looking
statements attributable to the Company or its affiliates, or people
acting on their behalf, are expressly qualified in their entirety
by the cautionary notices set forth in this paragraph. Undue
reliance should not be placed on these statements. Forward-looking
statements only speak as of the date on which they were made.
Except as otherwise required by the Brazilian securities
legislation and the rules and regulations of the CVM, or applicable
regulatory authorities of other countries, the Company and its
affiliates do not have any intention or obligation to update or
publicly announce the results of any revisions to any of its
forward-looking statements to reflect actual results, future events
or developments, changes in assumptions or changes in other factors
affecting forward-looking statements. However, it is advisable to
consult other disclosures made by the Company on matters related to
reports and communications filed by the Company within the CVM.
CONTACT: Oliver Slyfield -
Thomas Choquet; tel: +44
2077040880
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SOURCE Oi S.A.