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OI S.A.

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Oi S A : Management Proposal ESGM 04/30/21

04/21/2021 | 12:12pm EDT

Oi S.A. - In Judicial Reorganization

Corporate Taxpayers' Registry (CNPJ/ME) No. 76.535.764/0001-43

Board of Trade (NIRE) No. 3330029520-8

Publicly-Held Company

Management Proposal ("Proposal") to be submitted to the approval of the Extraordinary General Meeting to be held, on second call, on April 30, 2021, at 4:00 p.m., at the registered office of Oi S.A. - In Judicial reorganization ("Oi" or the "Company"), pursuant to Instruction No. 481 of the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários, or "CVM") of December 17, 2009, as amended ("CVM Instruction No. 481/09").

Messrs. Shareholders,

The Company's management hereby presents to its shareholders its proposal on the subject matters included in the Agenda for the Extraordinary General Meeting to be held, on second call, on April 30, 2021 ("EGM"), at 4:00 p.m., at the Company's registered office, as per the Call Notice presented in Annex Ito this Proposal, as follows:

  1. Ratification of the appointment and engagement of the specialized company Meden Consultoria Empresarial Ltda. ("Meden"), responsible for preparing (i) the appraisal report, at book value, of Telemar's shareholders' equity, to be incorporated to the Company's shareholders' equity, (ii) the valuation report of the shareholders' net equity of the Company and Telemar, at market prices, on the same date and according to the same criteria, for purposes of article 264 of Law no. 6.404/1976 (the "Brazilian Corporation Law"), (iii) the valuation report containing the economic and financial valuations of Telemar and Oi, according to the discounted cash flow method, and (iv) the valuation report of the spun-off portion of Brasil Telecom Comunicação Multimídia S.A. ("BTCM"), indirect subsidiary of the Company, to be incorporated to the Company's shareholders' equity (jointly, the "Valuation Reports").

The management of Oi proposes the ratification of the appointment and engagement, by the Company, of the specialized company Meden Consultoria Empresarial Ltda., a limited liability company with registered office at Rua Primeiro de Março, nº 23, pavimento 2, Centro, Rio de Janeiro, RJ, Postal Code [CEP] 20010-904, taxpayer identification (CNPJ/ME) number 27.936.447/0001-23, to prepare the Appraisal Reports.

Information regarding the appraisers, as required by Annex 21 to CVM Instruction No. 481/09, is available in Annex IIto this Proposal.

  1. Evaluation and deliberation about the valuation reports prepared by Meden, for purposes of the merger of Telemar by the Company.

1

Management proposes the approval, for the purposes of the merger of Telemar by the Company, of (i) the appraisal report, at book value, of Telemar's shareholders' equity, to be merged with and into the Company's shareholders' equity, based on Telemar's financial statements on the base date December 31, 2020; (ii) the appraisal report on the shareholders' equity of the Company and Telemar, at market prices, according to the same criteria and on the base date December 31, 2020, solely for purposes of article 264 of the Brazilian Corporation Law, and (iii) the appraisal report containing the economic-financial valuations of Telemar and Oi, according to the discounted cash flow method (all three together, the "Merger Appraisal Reports"), which constitute Annexes III, IVand Vto this Proposal, respectively.

  1. Evaluation and deliberation about the valuation report prepared by Meden, for the purposes of the transfer of the spun-off portion of BTCM to the Company.

Management proposes the approval of the appraisal report of the spun-off portion of BTCM, for the purposes of its merger into the Company's shareholders' equity. The report was prepared based on BTCM's financial statements on the base date December 31, 2020 ("Partial Spin-off Appraisal Report"), as per Annex VIto this Proposal.

  1. Examination, discussion and resolution on the Protocol and Justification of the Merger of Telemar Norte Leste S.A. - In Judicial Reorganization with and into Oi S.A. - In Judicial Reorganization, including all its attachments ("Protocol and Justification of the Merger"), which establishes the terms and conditions of the merger of Telemar with and into the Company ("Merger").

The Company's management proposes the approval of the Protocol and Justification of the Merger, as well as its annexes and relevant documents, which reflect the terms and conditions of the Merger, in accordance with Annex VII.

  1. Resolution on the Merger proposal, under the terms of the Protocol and Justification of the Merger and pursuant to article 227 of the Brazilian Corporation Law, and the corresponding amendment to the caput of article 5 of the Company's Bylaws to reflect the issuance of common shares to be held in treasury as a result of the Merger, without changing the amount of its capital stock.

The Company's management submits the Merger proposal to the approval of its shareholders, pursuant to the terms and conditions of the Protocol and Justification of the Merger and the Merger Appraisal Reports.

The Merger is one of the corporate reorganizations contemplated in the JRP with a view to optimizing the operations and increasing the results of the Companies under Reorganization and Oi's other direct and indirect subsidiaries, as well as obtaining a more efficient and appropriate structure for the implementation of the proposals set forth in the JRP and the continuity of the activities of the Oi Companies. As a result of the Merger, Telemar will cease to exist and Oi will succeed it, on a universal basis, to all of its assets, rights and obligations.

Management clarifies that the Merger will not result in an increase in Oi's shareholders' equity, as all of the shares of Telemar are held by Oi, which already has the consolidated record of Telemar, by equity accounting, in its consolidated financial statements. Accordingly, Oi's capital stock will not be altered as a result of the Merger.

2

Upon the merger, one hundred and ninety-two million, one hundred and fifty-three thousand, five hundred and forty-four (192,153,544) registered common shares and two hundred and seven million, seven thousand and one hundred and twenty-seven (207,007,127) registered Class "A" preferred shares issued by Telemar shall be extinguished and thirty million, five hundred and ninety-five thousand, six hundred and sixteen (30,595,616) registered Class "A" preferred shares issued by Telemar shall be replaced by six hundred and forty-four million, nineteen thousand and ninety (644,019,090) common shares issued by Oi, to be held in treasury, as set forth in article 226, paragraph 1, of the Brazilian Corporation Law and having observed the limit set forth in CVM Instruction No. 567/2015 ("Shares Issued in the Merger"). All of Oi's currently outstanding shares will preserve the same rights and advantages.

Under the terms of Art. 226, paragraph 1, of the Brazilian Corporation Law, all of the Shares Issued in the Merger will replace the thirty million, five hundred and ninety-five thousand, six hundred and sixteen (30,595,616) shares of Telemar that, on this date, are pledged in favor of Pharol, SGPS S.A. ("Pharol"), as guarantee of compliance with the obligation assumed by Oi upon the contribution of assets by Pharol to Oi's capital, in the context of the strategic alliance between them in 2014. This counter-guarantee, given as a pledge of shares, is intended to hold Pharol harmless in relation to tax contingencies classified as remote risk in Portugal. Accordingly, pursuant to the Merger, all of the Shares Issued in the Merger will be pledged as security in discharge of Oi's obligations to Pharol, by replacing the shares of Telemar that are pledged on this date.

It should be noted that the Merger is conditioned upon the publication in the Official Gazette of the Federal Executive of the act of transfer to Oi of the licenses held by Telemar for the provision of the public and private STFC and of the SCM, including the associated radio frequency rights- of-use authorizations. Thus, in the event that the aforementioned act of transfer of licenses has been published up to the time of the Meeting, the approval of the Merger at the Meeting will produce immediate effects. Otherwise, if the publication has not yet occurred, the Merger will only be effective and implemented on the date on which the publication occurs.

The main terms and conditions of the Merger, as required by article 20-A of CVM Instruction No. 481/09, are described in the Annex VIIIto this Proposal.

As a result of the Merger, the management submits to the approval of Oi's shareholders a proposal to amend the head of Article 5 of the Company's Bylaws, pursuant to Annexes IXand Xto this Proposal, containing, respectively, the origin and justification of the corporate amendment and the version compared to the current wording of the Bylaws. The recommended amendment is intended to reflect the issuance of common shares to be held in treasury resulting from the Merger, without altering the amount of Oi's capital stock.

Annexes IX and X also reflect the recommended resolution for item (8) of the Agenda.

  1. Examination, discussion and resolution on the Protocol and Justification of the Partial Spin-off of Brasil Telecom Comunicação Multimídia S.A. with the Transfer of the Spun-Off Portion to Oi S.A. - In Judicial Reorganization, including all its attachments ("Protocol and Justification of the Partial Spin-off"), which establishes the terms and conditions of the partial spin-off of BTCM (the "Partial Spin-off") with the transfer of the spun-off portion to the Company (the "Transfer of the Spun-Off Portion").

The Company's management proposes the approval of the Protocol and Justification of the Partial Spin-off, as well as its attachments and pertinent documents, which reflect the terms and conditions of the Partial Spin-off, pursuant to Annex XI.

3

  1. Resolution on the proposed Transfer of the Spun-off Portion of BTCM, in the terms of the Protocol and Justification of the Partial Spin-off and in the form of article 229 of the Brazilian Corporation Law.

The management of Oi proposes to its shareholders the approval of the Transfer of the Spun-off Portion, pursuant to the terms and conditions of the Protocol and Justification of the Spin-off and the Partial Spin-off Appraisal Report.

The Partial Spin-off and the Transfer of the Spun-Off Portion represent one of the corporate reorganization transactions necessary for the formation of the InfraCo UPI, as provided in the JRP, with the segregation and removal from BTCM's holdings of elements that are not related to the scope of activity of such UPI and the transfer of such elements to Oi. The formation of InfraCo UPI will help the Company obtain on the market the funds necessary to preserve the Companies in Judicial Reorganization and to finance their investments, based on a more flexible and efficient capital structure, in order to accelerate the expansion of the fiber optic networks of the Oi Companies and enable them to serve a greater number of customers from all segments throughout Brazil.

The Partial Spin-off and the Transfer of the Spun-Off Portion will not affect the value of the capital stock of Oi and BTCM or the number of shares into which they are divided, and there will be no dilution of interests held by the Oi shareholders.

The Partial Spin-off and the Transfer of the Spun-off Portion shall be approved without joint liability, so that Oi shall be responsible solely for any debts, obligations or liabilities relating to the Spun-off Portion transferred to it as a result of the Partial Spin-Off, regardless of their nature, whether present, contingent, past or future, and Oi shall not assume any liability, individually or jointly, for any debts, obligations or liabilities of BTCM, of whatever nature, whether present, contingent, past or future, that have not been transferred to Oi as a result of the Partial Spin-off and the Transfer of the Spun-off Portion at issue, as permitted by the sole paragraph of article 233 of the Brazilian Corporation Law.

The main terms and conditions of the Partial Spin-Off and the Transfer of the Spin-off Portion, as required by article 20-A of CVM Instruction No. 481/09, are described in the Annex XIIto this Proposal.

  1. Amendment to the wording of Article 2 of the Company's Bylaws, to further detail certain activities already covered in its current corporate purpose, as a result of the Transfer of the Spun-off Portion and in preparation for the corporate reorganizations involving Oi and its subsidiaries that are necessary to comply with the Judicial reorganization Plan.

Oi's management hereby submits to its shareholders a proposal for approval of the amendment to the wording of Article 2 of the Company's Bylaws, in the form of Annexes IXand Xof this Proposal, with a view to further detailing certain activities already covered in its current corporate purpose, as a result of the Transfer of the Spun-off Portion and in preparation for the corporate reorganizations involving the Oi Companies, which are necessary to comply with the JRP.

It is stressed that Annexes IX and X also reflect the recommendation for item (5) of the Agenda.

  1. Authorization for the Company's management to practice all acts necessary to effect the Merger and the Transfer of the Spun-off Portion.

4

The Company's management proposes that the managers be authorized to perform all acts necessary for the implementation of the matters on the Agenda, particularly the measures related to the transfer of the assets of Telemar and the spun-off portion of BTCM to Oi, as well as those resulting from the termination of Telemar.

Finally, the management clarifies to the shareholders that, pursuant to article 21-X, item I in conjunction with the sole paragraph, of CVM Instruction No. 481/09, voting instructions regarding the items of the Agenda that have been received through remote voting ballots sent by the shareholders at the time of the first call of the EGM will be treated normally on the second call.

Rio de Janeiro, April 20, 2021.

Board of Directors

Oi S.A. - In Judicial Reorganization

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Oi SA em Recuperação Judicial published this content on 21 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 April 2021 16:11:04 UTC.


© Publicnow 2021
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