RIO DE JANEIRO, June 17, 2016 /PRNewswire/ -- Oi S.A. (together
with certain of its affiliates, the "Company", Bovespa: OIBR3,
OIBR4; NYSE: OIBR and OIBR.C) announced today that it has been
involved in negotiations with members of an ad hoc group (the "Ad
Hoc Group") made up of holders of, or managers of entities holding
beneficial interests in, (i) the 9.750% Notes due 2016 issued by Oi
S.A., (ii) the 5.125% Notes due 2017 issued by Oi S.A. and
guaranteed by Telemar Norte Leste S.A. ("Telemar"), (iii) the
9.500% Notes due 2019 issued by Oi S.A. and guaranteed by Telemar,
(iv) the 5.500% Notes Due 2020 issued by Oi S.A. and guaranteed by
Telemar, (v) the 5.625% Notes due 2021 issued by Oi Brasil Holdings
Cooperatief U.A. ("Oi Netherlands") and guaranteed by Oi S.A., (vi)
the 5.750% Notes due 2022 issued by Oi Netherlands and guaranteed
by Oi S.A., (vii) the 6.250% Notes due 2016 issued by Portugal
Telecom International Finance B.V. ("PTIF") and guaranteed by Oi
S.A., (viii) the 4.375% Notes due 2017 issued by PTIF and
guaranteed by Oi S.A., (ix) the 5.875% Notes due 2018 issued by
PTIF and guaranteed by Oi S.A., (x) the 5.000% Notes due 2019
issued by PTIF and guaranteed by Oi S.A., (xi) the 4.625% Notes due
2020 issued by PTIF and guaranteed by Oi S.A., (xii) the 4.500%
Notes due 2025 issued by PTIF and guaranteed by Oi S.A., and (xiii)
the 5.242% Notes due 2017 issued by PTIF and guaranteed by Oi S.A.
(collectively, the "Notes," and such holders of the Notes, together
with the managers of entities holding beneficial interests in the
Notes, the "Noteholders").
Prior to the date hereof, the Company executed a confidentiality
agreement (the "Confidentiality Agreement") with certain Ad Hoc
Group members (the "Steering Committee") to facilitate discussions
concerning the Company's capital structure and potential
alternatives for a proposed restructuring of the
Company. Pursuant to the Confidentiality Agreement, the
Company agreed to disclose publicly, after the expiration of a
period set forth in the Confidentiality Agreement, certain
information regarding the discussions and/or negotiations that have
taken place between the Company and the Steering Committee
concerning a restructuring of the Company, as well as all material
non-public information concerning the Company that the Company has
provided to the Steering Committee (the "Confidential
Information"). 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 Confidentiality Agreement.
The Confidentiality Agreement has terminated in accordance with its
terms, except as otherwise provided therein.
Discussions with the Steering Committee
Representatives of the Company and the Company's financial and
legal advisors (the "Company Representatives") met in New York with representatives of the Steering
Committee and the Steering Committee's financial and legal advisors
(the "Noteholder Representatives") on June
6, 2016 and June 7, 2016 to
negotiate the terms of a potential financial restructuring of the
Company (a "Transaction").
As of the date hereof, no agreement concerning the terms of a
Transaction has been reached. While negotiations between the
Steering Committee and the Company 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 Transaction.
Confidential Information
In connection with the negotiations between the Steering
Committee and the Company regarding a Transaction, the Company
provided the Steering Committee with the following documents (the
"Documents") containing Confidential Information, which Documents
have been published on the Company's website:
- a summary of the Company's current debts;
- a redacted list of all Brazilian banks that have guaranteed
certain payments or debts that the Company owes and certain
information relating to such guarantees;
- the Company's summary debt forecasts for all scheduled interest
and amortization payments;
- the Company's cash flow forecast relating to its
derivatives contracts;
- a list of all of the Company's real assets and certain
information relating thereto;
- a presentation by the Company regarding certain regulatory
issues, including concession agreement revision and terms of
adjustment of conduct;
- a presentation by the Company, dated June 6, 2016, regarding its strategic plan;
- excerpts from a presentation given by Company Representatives
to the Noteholder Representatives, the content of which was
provided to the Steering Committee at meetings that took place
during the week of June 6, 2016;
and
- excerpts from a presentation by the Company summarizing its
contingent liabilities, which was shared with the Noteholder
Representatives in May of 2016.
Moreover, in the course of discussions with the Steering
Committee, the Company stated to the Steering Committee that
approximately 60% of its receivables are currently pledged to
Brazilian banks (the "Receivables Statement").
Additionally, during the course of the negotiations, on
June 6, 2016, the Company
Representatives provided to the Noteholder Representatives a
written restructuring term sheet representing the terms of a
potential Transaction (the "Company Term Sheet"). The Company
Term Sheet represents the only term sheet or proposal delivered to
date by the Company to the Steering Committee concerning the terms
of a Transaction.
In response to the Company Term Sheet, on June 11, 2016, the Noteholder Representatives
provided to the Company Representatives a written restructuring
term sheet representing the terms of a potential Transaction (the
"Noteholder Term Sheet"). The Noteholder Term Sheet represents
the only term sheet or proposal delivered to date by the Steering
Committee to the Company concerning the terms of a
Transaction. As of the date hereof, the Company has not
responded to the Noteholder Term Sheet or made a
counterproposal.
In addition to the disclaimers and qualifiers set forth in the
materials themselves, all statements made in the Documents, the
Receivables Statement, the Company Term Sheet and the Noteholder
Term Sheet 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 Documents, the
Receivables Statement, the Company Term Sheet or the Noteholder
Term Sheet 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 Documents, the
Receivables Statement, the Company Term Sheet and the Noteholder
Term Sheet is for discussion purposes only and shall not constitute
a commitment to vote for or consummate any transaction described
therein.
Furthermore, the contents of the Documents, the Receivables
Statement, the Company Term Sheet and the Noteholder Term Sheet
shall not be construed as guidance by the Company in relation to
its future results, and the Company waives any responsibility to
update such contents or information at any time.
The Company has published the Documents, the Company Term Sheet
and the Noteholder Term Sheet, and will publish translations of
such materials in Portuguese as soon as possible, on its website,
available at http://ir.oi.com.br (English) and http://oi.com.br/ri
(Portuguese).
Flavio Nicolay Guimaraes
Chief Financial Officer and Investor Relations Officer
Oi S.A.
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SOURCE Oi S.A.
