Brazil's Oi concludes billion-dollar capital increase

Brazilian telecoms operator Oi has wrapped up a key 4bn-real (US$1.06bn) capital increase following the conclusion of investors' subscription of new common shares issued by the company, the carrier said in a filing to the market.

The capital increase was part of a judicial reorganization plan approved by creditors in December 2017 and ratified by controllers last October.

In June 2016 Oi filed for Latin America's largest ever bankruptcy, proceeding to restructure around 65bn reais in debt.

For the capital increase, Oi issued a total 3.22bn new common shares at the issuance price of 1.24 reais per share.

As a result of the subscription and payment of the shares, Oi's capital stock grew to 32.5bn reais, represented by 5.95bn shares. Of these, 5.79bn were common shares and 157.7mn preferred shares, all of which are nominative and with no par value, the company said.

Oi is also raising fresh cash from the sale of certain assets. The carrier confirmed the hiring of financial institutions for the sale of non-core infrastructure assets, such as cellphone towers and datacenters.

This divestment could lead to up to 2bn reais in additional fresh money. The company plans to invest US$5.3bn in Brazil over the next three years.

Recently, Bratel/Pharol, a group of shareholders linked to Portugal Telecom which opposed the judicial reorganization plan (including the capital increase), signed a deal with Oi to end all litigation.

However, Brazilian market regulator CVM is calling for the prosecution of 30 executives who formed the controlling block of Oi and Portugal Telecom, following the two companies' loss-making collapsed merger.

Oi scheduled a shareholders' meeting for April 30 to discuss the latest moves.