December 15, 2017 / 11:01 AM / 3 months ago

RPT-UPDATE 2-Oi board may call shareholder meeting to debate restructuring plan -sources

(Repeats with no changes) (Adds Oi declining to comment, paragraph 3)

By Gram Slattery

RIO DE JANEIRO, Dec 14 (Reuters) - The board of Brazilian telecommunications company Oi SA will meet on Friday, and will likely call a shareholders meeting to debate a restructuring deal struck by its executives and key creditors, two sources familiar with the board’s thinking said on Thursday.

Also on Thursday, Societe Mondiale, the investment vehicle for tycoon Nelson Tanure, asked a bankruptcy judge to delay a creditors assembly scheduled for Tuesday, saying the new plan did not get proper approvals or include necessary documentation for a proposed capital increase.

The most recent moves underscore discontent among shareholders with a new plan to pull the company out of bankruptcy protection while handing control of the company to bondholders.

Oi declined to comment on Thursday but Oi’s management said on Wednesday, it had reached a deal with two major creditor groups on a plan to exit bankruptcy protection, the most significant breakthrough in over a year in Latin America’s latest development.

The creditors’ support likely opens the door to formal approval of the new restructuring plan at a Dec. 19 creditor meeting, lifting a cloud from a company that employs more than 100,000 Brazilians and serves 40 million wireless subscribers.

However, the plan implies a much more significant equity haircut than past proposals, and has driven a rift between the board and management. Common shares in Oi fell 10.3 percent on Thursday, after tumbling 23 percent on Wednesday.

According to one person familiar with the board’s strategy, calling a general shareholders’ meeting could have the effect of showing that shareholders themselves, not just their representatives on the board, are against the plan.

It could also lead to a postponement of the Dec. 19 creditors meeting, the person said.

In the court filing, Societe Mondiale, which controls Oi’s board through alliances, said the CEO of the company, Eurico Teles, lacked the right to unilaterally present a plan to creditors, which include distressed debt titans Aurelius Capital Management and Goldentree Asset Management.

The filing heavily criticized a recent decision by the Rio judge overseeing the process to give Teles unfettered rights to negotiate a restructuring plan without board input. (Reporting by Gram Slattery Editing by Sandra Maler)

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