Brazil telecoms regulator rejects Oi shareholder petition

Brazil’s telecommunications regulator Anatel said it rejected a petition by Societe Mondiale, a shareholder in Oi SA, to stop Aurelius Capital Management inking a debt restructuring accord with the struggling Brazilian telecoms company.

The regulator said in a statement on Tuesday, however, that it would open an administrative inquiry to examine claims levied by Societe Mondiale, an investment vehicle of distressed debt tycoon Nelson Tanure, regarding Aurelius’ holdings in the nation’s telecoms sector.

“It’s very welcome given that it opens an investigation into conflicts of interest with regards to Aurelius and its position as a controller of Nextel,” a spokesman for Societe Mondiale said.

Last week, Societe Mondiale, which controls Oi’s board through alliances, asked Anatel to prohibit the management of Oi, which is currently in bankruptcy protection, from signing a contract or engaging in debt negotiations that would imply a transfer of control to Aurelius allies.

U.S. hedge fund Aurelius is leading a group of Oi creditors known as the International Bondholders Committee, which is pushing for a debt restructuring plan opposed by the board.

Spokespeople for the Aurelius-affiliated creditors did not immediately respond to requests for comment.

In the original petition, Societe Mondiale said that under the bondholders’ restructuring plan, Aurelius would become co-controller of Oi. The complaint also said that Aurelius holds almost 17 percent of competing telecoms operator Nextel Communications Inc through intermediaries.

According to the complaint, Aurelius – due to its Nextel stake – would break Brazilian antitrust rules if its restructuring plan for Oi were to go into effect.

“Anatel decided to notify the parties against which the complaint was filed of a 15-day deadline to present clarifications regarding the possible transfer of control of Nextel Telecomunicacoes and Nextel Participacoes,” the regulator said, referring to Nextel units in Brazil.

According to a source close to Aurelius, the U.S. hedge fund disputes the Societe Mondiale claim that it holds close to 17 percent of Nextel, asserting that it holds less than 6 percent.