OI: Pharol Subsidiary Convenes General Meeting For February 7

(RTTNews) - Bratel, a shareholder of Oi and a subsidiary of Pharol (formerly Portugal Telecom), has scheduled an extraordinary Oi shareholder's meeting for February 7 to discuss the alleged violation of the company's by-laws to discuss the recovery plan approved last year.

"Pharol understands that the plan is not in compliance with the governance established in the current Oi by-laws, in direct opposition to shareholders' rights," the company said in a statement.

Pharol claims that the planned capital increase should result in an "unjustified dilution of shareholders by setting the issue price based on an assessment that does not reflect Oi's actual market value."

It also believes that any capital increase could only occur after the availability of all necessary information to the shareholders.

Pharol says there are also "undue privileges" for a group of creditors, who would receive "billionaire commissions and free delivery of Oi securities."

Oi's judicial recovery plan was approved by a majority of the shareholders at a general meeting of creditors that took place on December 19.

The plan provides for discounts and installments of part of the company's debt, which totals about R$ 64 billion, in addition to a capital increase of R$ 4 billion.

According to Oi, the moves aims at reducing net debt to less than three times the EBITDA (earnings before interest, taxes, depreciation, and amortization).