RIO DE JANEIRO, Oct. 12, 2017 /PRNewswire/ -- Oi S.A. –
In Judicial Reorganization ("Oi," and together with certain of
its affiliates, the "Company"), in compliance with Article 157,
paragraph 4 of Law 6,404/76 and pursuant to CVM Instruction No.
358/02, hereby informs its shareholders and the market in general
that the Company has been involved in discussions and negotiations
with certain individual holders (each, a "Noteholder") of, or
managers of entities holding, beneficial interests in, (i) the
9.750% Senior Notes due 2016 issued by Oi, (ii) the 5.125% Senior
Notes due 2017 issued by Oi and guaranteed by Telemar Norte Leste
S.A. – In Judicial Reorganization ("Telemar"), (iii) the 9.500%
Senior Notes due 2019 issued by Oi and guaranteed by Telemar, (iv)
the 5.500% Senior Notes Due 2020 issued by Oi and guaranteed by
Telemar, (v) the 5.625% Senior Notes due 2021 issued by Oi Brasil
Holdings Coöperatief U.A. – In Judicial Reorganization ("Oi Coop")
and guaranteed by Oi, (vi) the 5.750% Senior Notes due 2022 issued
by Oi Coop and guaranteed by Oi, (vii) the 6.250% Senior Notes due
2016 issued by Portugal Telecom International Finance B.V. – In
Judicial Reorganization ("PTIF") and guaranteed by Oi, (viii) the
4.375% Notes due 2017 issued by PTIF and guaranteed by Oi, (ix) the
5.875% Senior Notes due 2018 issued by PTIF and guaranteed by Oi,
(x) the 5.000% Senior Notes due 2019 issued by PTIF and guaranteed
by Oi, (xi) the 4.625% Senior Notes due 2020 issued by PTIF and
guaranteed by Oi, (xii) the 4.500% Notes due 2025 issued by PTIF
and guaranteed by Oi, and (xiii) the 5.242% Senior Notes due 2017
issued by PTIF and guaranteed by Oi (collectively, the
"Notes").
Confidentiality Agreements
On August 30, 2017, the Company
executed confidentiality agreements (the "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 (a
"Potential Transaction"). 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 (the "Confidential Information") regarding, or
shared in connection with, the discussions and/or negotiations that
have taken place between the Company and each Noteholder 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 Confidentiality
Agreements. The Confidentiality Agreements have terminated in
accordance with their terms, except as otherwise provided
therein.
Discussions with the Noteholders
Beginning on August 31, 2017 and
continuing on multiple dates throughout September and October 2017, representatives of the Company and
the Company's financial and legal advisors (the "Company
Representatives") met (such meetings, the "Meetings") in
New York and Rio de Janeiro with representatives of each
Noteholder and each Noteholder's respective financial and legal
advisors (the "Noteholder Representatives") to discuss the terms of
a Potential Transaction. As of the date hereof, although no
agreement concerning the terms of a Potential Transaction has been
reached, discussions and negotiations between the Company and each
Noteholder regarding the execution of plan support agreements and
equity commitment agreements have reached an advanced stage.
Notwithstanding the foregoing, 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.
Confidential Information
During the course of the discussions, each of the Company
Representatives and each of the Noteholder Representatives
submitted written plan support agreements and restructuring term
sheets representing the terms of a Potential Transaction.
On October 11, 2017, the Company
Representatives and each of the Noteholder Representatives
discussed and negotiated (i) a draft written restructuring term
sheet representing the terms of a Potential Transaction
(contemplating, among other things, the terms of a potential
capital increase) (the "Draft Term Sheet"), and (ii) a draft form
of plan support agreement (the "Draft PSA"). The Draft Term
Sheet represents the last term sheet or proposal exchanged among
the Company and each of the Noteholders concerning the terms of a
Potential Transaction, and the Draft PSA represents the last draft
of a form of plan support agreement exchanged among the Company and
each of the Noteholders, in each case, since the date that the
Confidentiality Agreements were executed.
Further, the Company Representatives provided to each of the
Noteholder Representatives (i) a written presentation summarizing,
among other things, the Company's current financial situation and
its capital expenditure needs on September
26, 2017 (the "CapEx Presentation"), (ii) a document
summarizing the potential scope of regulatory liabilities owed by
the Company to Agência Nacional de Telecomunicações on September 25, 2017 (the "Anatel Document"), (iii)
a written summary of the Company's cash flow projections on
September 30, 2017 (the "Cash Flow
Forecast"), (iv) a written presentation prepared by the Company's
financial advisor, Laplace Finanças, regarding the Company's
restructuring under the New Version of the Plan (as defined below)
on October 10, 2017 (the "Laplace
Presentation"), and (v) a written presentation prepared by the
Company regarding the Company's recent revisions to its long term
business plan and capital expenditure program on October 10, 2017 (the "Revised CapEx
Presentation," and together with the CapEx Presentation, the Anatel
Document, the Cash Flow Forecast, the Laplace Presentation, the
Draft Term Sheet and the Draft PSA, the "Cleansing
Materials"). The Company believes that the Cleansing
Materials include all documents constituting or including nonpublic
information exchanged between the Company and each of the
Noteholders during the course of discussions that would reasonably
be expected to be material to an investor making an investment
decision with respect to the purchase or sale of the securities of
the Company and/or its affiliates.
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. In the event that any statement herein or in the
CapEx Presentation, the Anatel Document, the Cash Flow Forecast,
the Laplace Presentation and/or the Revised CapEx Presentation is
inconsistent with or conflicts with the new version of the plan of
reorganization (the "New Version of the Plan") filed substantially
contemporaneously herewith in the judicial reorganization
proceeding of the Company pending in Brazil, the terms and conditions of the New
Version of the Plan prevail; provided, that any
inconsistency or conflict between the terms and conditions of the
New Version of the Plan, on the one hand, and the Draft Term Sheet
and/or the Draft PSA, on the other hand, remains under
discussion. 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 is for
discussion purposes only and shall not constitute a commitment to
consummate any transaction, or otherwise take any decisions or
actions contemplated in the Cleansing Materials.
Furthermore, the contents of the Cleansing Materials shall not
be construed as guidance by the Company in relation to its future
results, and the Company does not assume and expressly disclaims
any responsibility to update such contents or information at any
time.
This communication does not constitute an offer to sell or a
solicitation of an offer to buy securities. This
communication is not an offer to purchase or a solicitation of an
offer to purchase with respect to any Notes or any other
securities.
The Company has published the Cleansing Materials on its
website, available at http://ir.oi.com.br (English) and
http://oi.com.br/ri (Portuguese).
Carlos Augusto Machado Pereira de Almeida Brandão
Chief Financial Officer, Investor Relations Officer and Officer
Oi S.A. – In Judicial Reorganization
IR Contact: +55 21
3131-2918
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SOURCE Oi S.A.
