(Adds comments, background, Cerberus moves)
By Guillermo Parra-Bernal and Tatiana Bautzer
SAO PAULO Dec 2 Oi SA could scrap a proposed
three-year restriction on creditors swapping part of their debt
for equity, in a sign that Brazil's No. 4 wireless carrier wants
to lure bondholder support to exit bankruptcy protection faster,
two people with knowledge of the matter said on Friday.
The limit, which Oi included in a reorganization proposal on
Sept. 5, drew creditor anger and helped slow the carrier's
in-court restructuring. Chief Executive Officer Marco Schroeder
told Oi's two bondholder groups this week that shareholders now
seem less reluctant to accept a debt-for-equity swap, the people
According to the sources, Schroeder met on Monday with São
Paulo-based G5 Evercore, the advisor to a recently created
bondholder group, to discuss the restructuring. He met bankers
at a Moelis & Co-led creditor group on Friday, said the people,
who spoke on condition of anonymity.
That change in strategy would underscore how mounting
government pressure to find a solution for Oi has forced
creditors and shareholders to rapidly find common ground.
Schroeder became Oi's CEO after a first round of talks with the
Moelis-led group collapsed in June.
Rio de Janeiro-based Oi declined to comment, as did Moelis.
Efforts to obtain comments from G5 Evercore were unsuccessful.
Oi's 65.4 billion-real ($19 billion) bankruptcy protection
case, Brazil's biggest ever, has been complicated by September's
reorganization proposal, which creditors alleged favors
shareholders at their expense. The government may intervene if
the rift persists.
Reuters reported on Sept. 2 that the government would only
act if "disruptive investors" sought to take control of Oi
during the in-court reorganization plan.
The Moelis-led group is working with Egyptian billionaire
Naguib Sawiris to present an alternative reorganization plan for
Oi, drawing opposition from some government officials.
A resolution of the conflict between bondholders and
shareholders could draw more interested parties to Oi, which
filed for creditor protection after succumbing to years of
excessive borrowing and Brazil's harshest recession in eight
A third source said that a group of investors led by U.S.
distressed debt fund Cerberus Capital Management LP is
considering examining Oi's books to decide whether to place a
bid during the reorganization talks.
The same person said the Cerberus-led plan had already
garnered support from government officials and banks. New
York-based Cerberus did not have an immediate comment.
($1 = 3.4660 reais)
(Additional reporting by Ana Mano in São Paulo; Editing by Paul