Brazil’s troubled telecom operator Oi, one of the country’s most historically important communications providers, has gained an unexpected lifeline after the Rio de Janeiro Court of Justice (TJ-RJ) suspended the company’s recently declared bankruptcy and ordered it back into judicial recovery. The new ruling, issued by Judge Mônica Maria Costa of the Court’s First Chamber of Private Law, responds to appeals from Bradesco and Itaú, two major Brazilian financial institutions and key creditors.
The decision reverses a bankruptcy decree issued earlier in the week by Judge Simone Gastesi Chevrand, who had declared the company “technically insolvent.” The move reshaped market expectations, reactivated negotiations with creditors and returned Oi’s shares to trading on Brazil’s stock exchange, B3, in a highly volatile session.
A Critical Turning Point for One of Brazil’s Largest Telecom Operators
The court stated that a sudden liquidation would cause severe harm to creditors, disrupt essential telecom networks and potentially interrupt Brazil’s emergency and public-service communication systems. Oi still provides fixed-line services in thousands of Brazilian municipalities and supports critical government connectivity, including security, healthcare and emergency hotlines.
Judge Costa emphasized that the company has “a concrete probability of receiving relevant assets” from an arbitration case against Brazil’s national telecom regulator, Anatel. Depending on the ruling, these credits could range from R$ 5 billion to R$ 50 billion — enough to cover medium- and long-term obligations.
She also warned that the Brazilian Federal Government has not presented a “realistic position” on how to support unprofitable public-interest telecom services that Oi continues to operate. Without intervention, Brazil could face either direct federal control of these services or their shutdown.
Brazil’s Oi Races to Sell Assets and Generate Cash
According to reporting from Estadão, O Globo, Folha de S.Paulo, InfoMoney, CNN Brasil, Metropoles, and Money Times, the restored judicial recovery gives Oi approximately 120 days to sell what remains of its major Brazilian assets:
- Oi Soluções, focused on corporate and government clients
- A 27.26% stake in V.tal, its former fiber-optic network unit
- About 7,800 Brazilian real estate properties
- Additional shareholdings, physical assets and judicial deposits
Market estimates predict the asset package could be worth R$ 18–25 billion, though many properties still lack updated documentation — more than 7,500 are undergoing due diligence.
If Oi cannot complete these sales, it may again face bankruptcy under Brazilian law.
Creditor Pressure and Scrutiny of Pimco’s Role in Brazil
The ruling also reinstates the previous court-appointed administrators and orders an investigation into Pimco, the U.S. asset manager that became Oi’s controlling shareholder after a debt conversion. Brazilian authorities will assess whether Pimco contributed to governance failures during Oi’s decline.
Brazil’s Public Prosecutor’s Office requested that Anatel and the Federal Government join the case to present concrete solutions for preserving essential telecom services, including potential federal financial support.
Wild Volatility as Oi Shares Return to Brazil’s B3 Exchange
Trading of Oi shares had been suspended following the bankruptcy decree. After the reversal, Oi returned to B3, Brazil’s main securities exchange, experiencing dramatic swings:
- OIBR3 closed at R$ 0.20 (+11.11%)
- OIBR4 surged to R$ 3.02 (+24.28%), after hitting intraday spikes of nearly 80%
Analysts told InfoMoney that the reversal boosts chances of an orderly asset sale — a key factor for investors seeking recovery.
A Decade of Financial Turbulence in Brazil’s Telecom Sector
This marks Oi’s second judicial recovery since 2016. The company first entered the process with R$ 65 billion in debt — one of Brazil’s largest corporate defaults. Years of asset sales followed, yet Oi never regained sustainable positive cash flow.
In 2023, Oi filed for a second recovery with R$ 43.7 billion in liabilities. The roots of the crisis go back to Brazil’s “national champions” policy of the 2000s, including controversial mergers approved by the federal government, such as Oi’s acquisition of Brasil Telecom and the later union with Portugal Telecom.
What This Decision Means for Brazil Moving Forward
The court’s decision does not resolve the crisis, but it provides time — and a final opportunity — for Brazil’s Oi to avoid collapse.
To survive, Oi must:
- Sell high-value assets in Brazil
- Secure a favorable outcome in its arbitration with Anatel
- Receive government clarity on subsidizing essential public-service networks
- Restore liquidity after months of negative cash flow
As Judge Costa stated, the scenario is “serious,” but “not yet irreversibly terminal.”
