A Brazilian court on Wednesday accepted Oi SA’s bankruptcy protection petition, allowing the country’s largest phone company to move ahead with plans to reorganize operations and restructure 65.4 billion raise ($20.2 billion) of debt.
The decision was made by judge Fernando Viana of the 7th Commercial Branch of Rio de Janeiro’s Justice Tribunal who will supervise the reorganization on behalf of Oi and creditors, the court said in a statement.
Oi filed its petition with the court on June 20 after talks with creditors ground to a halt ahead of a July debt payment.
The protection provided under Brazilian law is similar to that provided by Chapter 11 of the US bankruptcy code.
Protection will also apply to Oi partners and subsidiaries Portugal Telecom, Telemar Norte Leste, Oi Movel, Copart 4 e 5 Participações and Oi Brasil, the court said.
Viana said he accepted the petition because of the company’s importance to the Brazilian economy, the need for an organized restructuring of its debts to protect Oi’s 70 million clients, 140,000 employees, its suppliers and the taxes it pays to the Brazilian government, the statement said.
($1 = 3.24 Brazilian reais)