UPDATE 2-Banks, bondholder group eye Brazil's Oi debt relief -source
(Adds BNDES confirmation)
By Guillermo Parra-Bernal
SAO PAULO Aug 16 (Reuters) - Banks and bondholders accounting for more than half of Oi SA's debt of 65.4 billion reais ($20 billion) are considering proposing a 5-year grace period and lower borrowing costs to speed up the Brazilian phone carrier's in-court reorganization, a person with direct knowledge of the talks said on Tuesday.
The person, who requested anonymity because the discussions are preliminary and remain confidential, said the bondholder group advised by Moelis & Co and a number of lenders, including state-run Banco do Brasil SA and China Development Bank Corp, are discussing several options to provide Oi with a debt relief plan.
Oi, Brazil's No. 1 fixed-line phone carrier, filed in June for the country's largest ever in-court reorganization plan after it ran out of time to reorganize operations and restructure liabilities during a harsh recession.
Oi owes 17 billion reais to banks and about 35 billion reais to bondholders.
Proposed options for debt relief include cutting borrowing costs, with bondholders agreeing to take losses on their investments in Oi's notes, the person said. The emergence of proposals from other bondholders and minority shareholders has brought the banks and the Moelis-led group closer, the person said.
"The parties are working closely and jointly in order to accelerate Oi's in-court reorganization plan and thwart any unconstructive proposal that could potentially generate noise in the process," the person said, adding that bondholders are interested in a solution that involves swapping part of their debt into equity of the revamped company.
The source said the banks involved in the talks include a number of export credit agencies. Continuación...