The judge overseeing the restructuring process of Brazilian telecom company Oi SA yesterday approved a massive debt restructuring plan and called a proposed shareholders meeting “absolutely unnecessary,” Reuters reported. In the decision, Judge Fernando Viana gave the official go-ahead to Latin America’s largest ever in-court debt reorganization. On Dec. 20, a majority of Oi creditors approved a plan to restructure 65 billion reais ($20.1 billion) of debt, putting an end to a year and a half of negotiations. The plan upset major shareholders, however, as it hands up to 75 percent of the company to creditors that include distressed debt funds, such as Aurelius Capital Management, and severely dilutes equity.
Fortior Solutions, the Hillsboro, Ore.-based company known as SureID during better times, has filed for chapter 11 protection, The Oregonian reported. The filing Friday capped a difficult year for the company, once among Oregon's most highly touted tech businesses. SureID collapsed last spring after losing a contract to supply identity verification services to the U.S. Navy, a deal that was responsible for 70 percent of its $57 million in revenue. The bankruptcy filing says that Fortior owed $57.9 million under a loan agreement with Goldman Sachs dating to 2015. Without the Navy business, SureID had no way to cover the debt. SureID laid off 400 people last year, most of them in Hillsboro, before selling part of its business in October to Sterling Financial Solutions for $6.6 million. The bankruptcy filing identifies Goldman Sachs as owning a "significant" chunk of New York-based Sterling, a company that specializes in background screening of prospective employees. The remaining portion of SureID changed its name to Fortior, focused on verification contracts with other branches of the military. Fortior had approximately 105 employees left after the Sterling deal.
Oi SA’s largest equity investor called for a shareholders meeting to decide whether to take legal action against the chief executive officer and the chief financial officer and to scrutinize parts of the Brazilian phone company’s restructuring plan, Bloomberg News reported. CEO Eurico Teles and CFO Carlos Brandao exceeded their authority by negotiating the plan with creditors without the board’s approval, and investors should decide whether to file a civil liability claim against them, Pharol SGPS SA said in a letter published on Friday in a filing. The bankruptcy court overseeing Oi’s restructuring gave Teles full authority to negotiate with creditors without requiring the board’s approval, but that hasn’t stopped the shareholders from threatening legal action to keep the deal from going forward. The plan’s installment of new board members and a capital increase also require shareholders’ approval, said Pharol, a publicly traded holding company based in Lisbon, Portugal.
Philip Falcone’s hedge fund said it was defrauded by Apollo Global Management LLC into pouring $2 billion into the ill-fated wireless venture formerly known as LightSquared Inc., WSJ Pro Bankruptcy reported. Falcone’s Harbinger Capital Partners filed a lawsuit in New York state court on Thursday accusing Apollo of concealing flaws in a planned telecommunications network that ran into regulatory roadblocks years later, driving LightSquared into a costly bankruptcy. In the lawsuit, Harbinger claimed to have found evidence from U.S. patent archives showing that Apollo’s directors “knew, or were reckless in not knowing” about a set of 2001 test results casting doubt on the wireless network technology.
Creditors in Brazilian telecoms company Oi SA today approved a plan to restructure $20 billion in debt owed by the firm, overcoming the main hurdle in Latin America’s largest-ever bankruptcy process, Reuters reported. After a marathon 15-hour meeting in Rio de Janeiro, three of four creditor classes voted nearly unanimously for the plan. The only major ‘no’ vote appeared to come from national telecoms regulator Anatel, which held billions of dollars in Oi debt through unpaid regulatory fines. The vote caps off a year and a half of bruising negotiations, in which creditors and the company fought over how to best restructure some 65 billion reais ($20 billion) in debt.
Creditors of Oi SA began gathering in Rio de Janeiro today to vote on a plan to take the Brazilian telecoms operator out of bankruptcy protection, despite a flurry of legal actions by a key shareholder trying to stop the vote, Reuters reported. By mid-morning, creditors in Latin America’s largest-ever bankruptcy case started trickling into the 22,000-square-meter RioCentro convention center. The company, which spent some 2 million reais ($600,000) on the meeting, had readied the facility twice before, but was forced to break down the temporary infrastructure when court battles and creditor fights delayed previous votes. This time, however, Oi’s management appeared likely to win over enough support from creditors to restructure some 65.4 billion reais in debt after a year and a half of contentious talks. Major bondholders have already expressed support for the plan, which could give them control of the company through a debt-for-equity swap. Still, some creditors such as state development bank BNDES, whose support is required for passage, have been more circumspect.
Global A&T Electronics, a Singapore-based chip assembler that took on hefty debt a decade ago through a buyout by TPG Capital and Affinity Equity Partners, filed for bankruptcy as a 2013 debt exchange came back to haunt it, Bloomberg News reported. The chip-assembler listed debt of more than $1 billion and assets of over $500 million in chapter 11 papers filed yesterday in U.S. Bankruptcy Court in New York. Pursued by bondholders since 2014, when a GSO Capital Partners fund and others cried foul over the debt exchange, Global A&T finally seemed to put the problem behind it when it announced a settlement in mid-September. At the same time, other bondholders had come forward to say they weren’t giving up their own lawsuit over the debt exchange, brought in 2017.
