Oi bankruptcy: government assesses impact on aviation, emergency lines and lotteries
The Ministry of Communications informed this Monday that it will evaluate the decision of the Rio de Janeiro Court that declared the bankruptcy of Grupo Oi and the impacts it could have on telecommunications services in the country. In a statement, the ministry stated that it is committed to ensuring the continuity of the services provided by the operator, “even if they are taken over by another company”.
OIBR3: Oi shares fall more than 30% after the court declares the company bankrupt
In the order, the judge also pointed to the orderly liquidation of Oi’s assets, aiming to maximize the value for payment of the remaining balance with creditors
Hi: as a company it went from “national supertele” to filing for insolvency; understand
Tele Rio, which once had the largest infrastructure network in the country, filed a petition for recognition of the state of insolvency
The ministry also highlighted that it has closely monitored the company’s judicial recovery process and compliance with the obligations signed by Oi with the Public Authorities.
Bankruptcy was declared by the 7th Business Court of the Court of Justice of Rio de Janeiro (TJ-RJ), following a request from the company’s judicial administrator, lawyer Bruno Rezende, who also worked in the Lojas Americanas case.
When justifying the decision, judge Simone Gastesi Chevrand stated that “Oi is technically bankrupt” and ordered the provisional continuity of operations, under judicial administration, until a new management structure is defined.
Oi currently maintains around 4,600 contracts with federal, state and municipal public bodies, including ministries, universities, state-owned companies and institutions that depend on its telecommunications services. The company is also responsible for services considered critical, such as emergency lines — police, firefighters and civil defense — and the connection of 1,300 Caixa Econômica Federal lotteries.
Present in more than 7,500 locations, Oi is, in many cases, the only telephone operator in operation, with obligations signed with the National Telecommunications Agency (Anatel) to guarantee the continuity of the voice service.
The company also provides cybersecurity, cloud computing and internet of things (IoT) solutions to public bodies, through subsidiaries and partner companies.
The Court determined that the current phase is one of full and programmed transition of activities, to avoid interruption of essential services. One example is the case of the Integrated Air Defense and Air Traffic Control Center (Cindacta), whose connectivity began to be transferred to the operator Claro, in a process that should last several months.
The judge highlighted the complexity of the operation, which required “interface with more than 100 civil and military authorities”, illustrating the challenge that it will be to replace Oi in strategic contracts.
