The chief executive officer of Brazilian telecoms company Oi SA, Marco Schroeder, has resigned. This move has completely shocked the government. The reason behind this resignation is due to the Brazilian telecommunications company becoming entangled in Latin America’s biggest-ever bankruptcy saga. The Brazilian government took on billions of dollars in Oi debt through state banks and regulatory fines.
The source, who asked for secrecy due to the sensitivity of the issue, mentioned that there has been work behind the scenes to take the debt-laden carrier out of bankruptcy protection under new management.
The spokeswoman for Portugal’s Pharol SGPS SA, who also retains about 27.5 percent of Oi’s voting shares and is also a part of a controlling shareholder block, quoted that the resignation of Schroeder came as no surprise.
The change echoes gaps among Oi’s management and board, run by shareholders associated with troubled debt businessperson Nelson Tanure. Schroeder made the decisions over the last few months for both shareholders and creditors to make concessions, while the board has trapped to a reform tender excluded by key bondholder groups.
However, the Oi spokeswoman failed to remark on this issue. Three sources who have some idea of the condition expressed earlier on Friday on one report that Schroeder had decided to resign.
Common shares in Oi fell following the statement, finishing 4 percent lower than it started.
The Oi is only two weeks away from a crucial creditor poll on a proposal to restructure 65 billion reals ($20 billion USD) of debt, with the help of the country’s major fixed-line phone operator at stake and more than 100,000 jobs on the line.
Again, in October, Anatel, telecoms regulator, had threatened to interfere in the carrier if it switched administration. However, sources from government source quoted that Schroeder’s parting on Friday did not spark a need for intercession. The source mentioned that the debt-laden carrier is working towards coming out of bankruptcy protection, and it will be under new management.