Oi’s Fiber Business Receives Unique Bid: A Complex Share-Based Offer from V.tal

V.tal, a neutral network operator, was the sole bidder in the second round of the auction for Oi’s broadband unit, ClientCo, offering R$ 5.683 billion ($1.033 billion). This auction marks a crucial step in Oi’s judicial recovery process.

V.tal’s proposal involves no direct cash payment. Instead, it consists of a complex share exchange, debt forgiveness, and operator commitments. The offer includes R$ 4.99 billion ($907.27 million) in share issuance for ClientCo.

Additionally, V.tal proposes R$ 375 million ($68 million) in extraconcursal credits against Oi and R$ 308 million ($56 million) in debentures. This unique structure reflects the intricate financial maneuvers in the telecom industry.

Oi holds a minority stake in V.tal, adding an interesting dimension to the bid. The proposal aligns with Oi’s judicial recovery plan, which now requires creditor evaluation within ten days.

The market anticipated this outcome. V.tal had previously committed to submitting an offer if no other interested parties emerged for Oi’s fiber business.

This second round follows a July auction where Ligga Telecomunicações bid R$ 1.05 billion ($190.91 million). That offer fell short of the R$ 7.3 billion ($1.327 billion) minimum set in Oi’s recovery plan.

Oi’s judicial administrators will present V.tal’s offer to creditors for deliberation. The sale aims to bolster Oi’s cash reserves for fulfilling its recovery plan obligations.

Initially, Ligga Telecom remained in contention for this round. However, the Rio de Janeiro court revised its decision, removing Ligga from the auction at V.tal’s request.

V.tal argued successfully that this second round differed from the first. The court agreed that Ligga’s previous compliance declaration no longer applied to the new auction terms.

Oi’s Fiber Business Receives Unique Bid: A Complex Share-Based Offer from V.tal

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