Hi ask judicial recovery R$ 65 billion, the largest in the history of Brazil

Without reaching an agreement with domestic and foreign creditors, the carrier Hi filed for reorganization on Monday (20) to initiate a new round of negotiations, now with judicial protection against bankruptcy.
Oi is the largest operator of fixed telephony in Brazil, tied with Vivo (each with participation of 34.4%), and the fourth in mobile, with 18.6 percent of the market.
With a debt of R$ 65.4 billion, the request for recovery of Hi run in Rio de Janeiro and, if accepted, will be the biggest in history. In April, Seven Brazil, Petrobras '' rig company, was to negotiate Justice R$ 19.3 billion with lenders.
Most of the Oi''s debt is financial (about 50 billion R$). Enter the account still about $ 14 billion in contingencies-like fines of Anatel and legal discussions-and about 1.5 billion R$ for suppliers.
Financial debt, about 70% are in foreign currency and most WINS this year. Only in the first quarter, the company burned $ 8 billion of cash, most of it to honor these commitments.
Months earlier, the company tried to avoid putting together a recovery plan. The proposal submitted to the lenders was change half the debt for shares in tele. The other half would be paid in six years with discounts of up to 75%.
The problem is that, for this plan, current shareholders would be diluted (the stake would be decreased) by up to 95%. Therefore, would lose seats in the Board of Directors and voice command.
The Portuguese members, gathered in the company, with about of Pharol 27% of shares, refused the plan in the middle of talks with lenders. Were accompanied by other partners. Given this, the then President of the company, Bayard, who had been leading the negotiations, quit on day 10 and was replaced by Mark Schroeder, Chief Financial Officer.
Without time to close a deal with creditors, requiring membership of at least 95% of the creditors, the Hi decided to protect with the retrieval request.
While the judge examines whether to accept the request, the company requested a decision on the basis of urgency to prevent the mandatory payments on debt series-what would happen only if you enter with the retrieval request.
The carrier will continue operating normally, even though justice acate request. There will be no layoffs because of this process. Anatel (Agência Nacional de Telecomunicações) will do a follow-up.
heavy weight
The problem of Hi''s its indebtedness. The business itself raises box. In 2015, tele R$ 40.5 billion won, but the financial debt had already exceeded 50 billion R$, reducing its capacity for investment and competition.
The Oi''s situation got to that point by a series of decisions that would transform into a supertele national control. In 2008, then-President Luiz Inacio Lula da Silva has changed the General Telecommunications Law for the firm bought the Brazil Telecom. Oi was acting throughout Brazil, with the exception of São Paulo-a uniqueness of the book.
Most of the money involved in this transaction was used to exchange shares of Brazil Telecom for Oi''s papers. In the middle of the process, there was a hidden debt of about 1.2 billion R$.
In 2010, with the interference of Lula, the Portugal Telecom bought 23 percent of the total capital of Hi. This partnership has narrowed in 2014 with the merger of the two telcos. Again, there was a hidden debt (€ 897 million) and, in the end, the merger raised the total debt at $ 27 billion.