Oi loses R$ 2.5 billion in the stock market in 5 days after the debt scare

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A Hey it has lost almost 1/4 of its market value in the past week. The company started on Monday, the 19th, valued at almost R$10 billion, and ended Friday, the 23rd, at R$7.5 billion. On Monday, the tele announced its three-year plan. Who will be the Hi of 2024? Everything went very smoothly and within the script in a 25-page presentation. Up to page 24.

From that page on, which dealt with financial leverage, life would be one of explanations throughout the week, especially as the company presents itself to investors looking for US$800 million in international bonds.

Analysts and investors who bought stocks in recent months were unprepared for the reality, even though it hadn’t been hidden from anyone. When it completes the approvals for the sale of the mobile network and fiber control, Oi will have carried out an asset sale of R$34.6 billion. A company dedicated to customer service and light in assets will emerge from this process, which wants to promote accelerated growth.

But if you don’t follow very strong discipline on the financial front and don’t maintain the deleveraging process — yes, yet! — will remain a company with a lot of debt. Unsustainable. If nothing is done, Oi will have a net debt equivalent to 6.6 times the estimated Ebitda at the end of 2024.

In absolute terms, it would be a net indebtedness of almost R$14 billion — R$5.5 billion more than the market estimated. However, this is the scenario that happens if Oi does nothing about it in the coming years. And that’s not the plan. But it was a shock to the market.

the devil lives in the details

On Monday, investors were reminded that in addition to the financial debts they are used to talking about more often, when Oi comes out of bankruptcy protection it will have to deal with some other commitments. It will need to make R$1.7 billion in judicial deposits and settle R$600 million in pending matters with Fundação Atlântico — which takes care of employees’ pension funds.