The troubles of Brazilian service provider Oi seem to be continuing as attempts to sell off one of its businesses have run into new problems.
Brazilian internet service provider Ligga Telecomunicações was apparently the sole bidder for Oi’s fibre broadband services company ClientCo this week.
Oi opened a competitive process to sell the unit, which provides broadband fibre services to retail and business customers, as part of its current bankruptcy proceedings in Brazil.
However, the process wasn’t very competitive. Even though bids from other companies were expected, when envelope opening in the closed proposals tender process took place on Wednesday there was only one bid.
Even worse, Oi says that Ligga’s offer of about US$187.8 million for ClientCo was well below the minimum approved by creditors as part of ongoing bankruptcy proceedings. However, despite the bid being below what they had hoped, the offer will now be analysed by Oi's creditors.
News site BNamericas says there were rumours in the market that Oi was asking for a price that excessively overvalued the operation, especially given the loss of subscribers in recent months and the operator's low investment in the assets.
Under the terms of the tender, neutral network V.tal will be allowed to bid only in a second round. As BNamericas explains, V.tal is a joint venture created following the partial sale of Oi's fibre infrastructure network to funds linked to Brazilian financial company BTG Pactual in a previous tender. Even more confusingly, V.tal has signed an MoU with Ligga to acquire the ISP.
Earlier this week news reports suggested that Oi and its creditors had agreed to postpone the deadline for issuing new debt, part of Oi’s ongoing recovery plan, to July 31 after the result of the sale of ClientCo. What happens now is unclear, though a share rather than cash-based sale to V.tal seems possible.
The Oi debt saga has been ongoing since the first judicial reorganisation in 2016. In early 2023 Oi filed its second request for judicial recovery with the aim of protecting cash resources and avoiding bankruptcy.
