A judge has suspended the decision to declare the telecommunications operator bankrupt, following legal appeals by banks Bradesco and Itaú.
“Bankruptcy does not represent the best solution,” said the judge, noting the company’s closure would cause “direct damages to society and public administration, especially since its operations are directly related to activities of public interest.”
The recovery plan approved by creditors “is not currently deemed unfeasible,” the judge stated, adding that “the company’s recent results do not definitively indicate a cause for its collapse, but rather highlight severe management problems.”
The judicial decision covered in today’s news mandates that the company return to the process of judicial recovery and fulfill the entire plan approved by creditors. As Oi is the sole provider of voice services in 7,500 locations and holds more than 4,664 government contracts, it operates emergency phones for the Unified Health System (SUS), the Brazilian Institute of Environment (Ibama), and police forces, among others.
The magistrate recalled that “the largest negative gross revenue figures occur from May 2025 to October of the same year” and noted that economic difficulties worsened following the management formed after Pimco acquired 40% controlling interest in the company through partial credit capitalization.
“Indications of abuse of power by controllers and administrators were determining factors for the first-instance judge to order the removal of the administrators of Grupo Oi,” the magistrate remarked, citing examples of what is considered mismanagement.
Among the cited instances is the “hiring of professionals with extremely high costs, including lawyers hired to file for Chapter 11 bankruptcy in the USA [a U.S. bankruptcy law filing] at a cost of $100 million, incompatible with the company’s recovery status.”
Oi, undergoing its second financial recovery process, provides integrated fixed voice, broadband, and pay-TV services, recording a gross debt of $6.6 billion (€5.7 billion) in the second quarter of this year, according to the financial report cited by Bloomberg.
Pacific Investment Management is the largest shareholder with approximately 36% of total capital, according to Oi’s website.
