February 10, 2017 / 2:33 PM / a year ago

Cerberus to unveil proposal for Brazil's Oi in March -source

SAO PAULO, Feb 9 (Reuters) - A Cerberus Capital Management LP-led group of investors plans to unveil an alternative in-court restructuring proposal for debt-laden Brazilian phone carrier Oi SA as early as next month, right after finalizing due diligence procedures, a person with direct knowledge of the plan said on Friday.

New York-based Cerberus is still gauging the size of Oi’s future equity needs and how the carrier’s creditors will have to be compensated, said the person, who asked for anonymity because the process is underway. Oi filed for Brazil’s largest-ever bankruptcy protection in June.

Cerberus, which specializes in private equity and distressed debt investments, could still arrange partners to advance on the Oi proposal should the company’s shareholders and bondholders agree to discuss it, the person added. Oi’s shareholders and creditors are locked in a battle for control of Brazil’s No. 4 wireless carrier, which is saddled with 65.4 billion reais ($21 billion) of debt.

The media office of Cerberus declined to comment. Reuters reported Cerberus’ interest in Oi on Dec. 6.

Oi did not immediately comment.

Cerberus is the only potential bidder that has formally undertaken due diligence procedures, because it is has not partnered with Oi’s creditors, the person said.

Billionaire Paul Singer’s Elliott Management Corp recently made an informal proposal committing to invest around $3 billion into Oi. The board of Oi recently shunned Elliott’s proposal and another put forward by Egyptian billionaire Naguib Sawiris and a group of Oi bondholders led by Moelis & Co.

Common shares of Oi rose 2.9 percent to 3.74 reais on Friday, extending gains to 47 percent this year.

$1 = 3.1150 reais Editing by Guillermo Parra-Bernal and Meredith Mazzilli

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