The Rio de Janeiro Court of Justice declared the bankruptcy of telecom operator Oi on Monday, November 10, ending a ten-year judicial recovery process fraught with allegations of non-compliance. The company, once Latin America's largest, amassed billions in debt despite asset sales. The judge highlighted the firm's asset stripping.
Oi's bankruptcy was declared after a prolonged period of financial woes that began in 2012, shortly after the operator took the lead in Brazil's telecommunications sector with explosive growth. That year, early signs of fragility emerged from poorly calculated acquisitions and high operational costs.
In 2016, Oi filed for judicial recovery with debts exceeding R$ 60 billion. The process ended in 2022 after selling its main operations to competitors like Telefônica Brasil, Claro, and Tim. However, in 2023, the company sought further judicial relief from creditors in a turbulent proceeding marked by allegations of plan non-compliance and asset stripping.
Judge Simone Gastesi Chevrand, in her ruling, noted that Oi divested its assets, selling operations and taking on new financial obligations while debts piled up. Questioned expenses included hiring lawyers to attempt fitting the operator into the U.S. Chapter 11, costing US$ 100 million (R$ 530 million) from the company's coffers. Other services were contracted at 'incompatible' values for the recovery process.
"Oi was stripped bare and there is no longer any business activity to preserve that matches the size of the existing debt," the judge wrote.
Through the sales, Oi's mobile network went to a Claro and Vivo consortium; its satellite pay-TV (DTH) operations to SKY; its fiber optic network to BTG Pactual; and its tower infrastructure to Highline. Oi was created in 1998 from the Telebrás privatization, initially operating as Telemar in over 60% of the country, and adopted the Oi name in 2002.
Currently, the company has monthly revenue of R$ 200 million but liabilities around R$ 1.7 billion, exceeding its assets, according to the Rio de Janeiro Court of Justice.