November 25, 2016 / 1:52 AM / 2 years ago

Dissident creditor group in Brazil's Oi retains G5 Evercore as adviser

SAO PAULO, Nov 24 (Reuters) - A newly formed group of dissident bondholders in Oi SA has retained G5 Evercore to advise it in the Brazilian carrier’s in-court reorganization, which has recently turned more protracted amid shareholder and bondholder rifts.

In a statement distributed late on Thursday, the International Bondholder Committee said São Paulo-based G5 Evercore was being asked to find common ground with stakeholders of the debt-laden Brazilian carrier, which filed in June for the country’s largest-ever bankruptcy.

The International Bondholder Committee was formed on Nov. 11, when most members of a similar group led by Moelis & Co left to pursue a different strategy for Oi’s reorganization. Reuters reported the same day that New York-based distressed debt fund Aurelius Capital Management LLC was behind the move.

“We have already reached out to Oi management to engage in negotiations,” said Corrado Varoli, G5 Evercore’s chief executive officer, was quoted by the statement as saying.

The G5 Evercore-led group, which has an undisclosed number of creditors holding $1.5 billion of the face amount of Oi bonds, has kept adding more members, the statement said. Most creditors in the group own bonds issued by Oi’s two Netherlands-based finance subsidiaries - Portugal Telecom International Finance BV and Oi Brasil Holdings Cooperatif UA.

Varoli, a former head of Goldman Sachs Group Inc in Brazil, will personally spearhead negotiations for the International Bondholder Committee, which will also count with law firms Dechert LLP and Rio de Janeiro-based Sergio Bermudes Advogados as legal advisers.

People familiar with Oi’s 65.4 billion real reorganization have said the addition of a second creditor group could add complexity to the carrier’s bankruptcy protection case, which the Brazilian government already has made clear it wants to influence in a way that ensures the company’s survival.

Aside from inter-creditor issues, industry watchdog Anatel is closely monitoring the carrier, and has warned it could intervene the carrier if rifts between shareholders and creditors fail to cease.

The Moelis-led creditor group is currently working with Egyptian billionaire Naguib Sawiris to present an alternative reorganization plan for Oi. (Editing by Bill Trott)

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