Oi's merger with Portugal Telecom buried it under R$65bn of debt

Oi was one of Brazil's largest telecommunications companies, a former state monopoly privatised in the 1990s, providing fixed-line, mobile and broadband services. In 2013 it agreed to merge with Portugal Telecom, a deal meant to create a transatlantic operator.

The merger, completed in 2014, was financed with heavy borrowing, including a US$5.9 billion share offering. But Portugal Telecom's finances were already compromised: its largest shareholder, Rioforte, was part of the Espírito Santo group, which collapsed in 2014 when Banco Espírito Santo failed. Rioforte defaulted on about US$1.2 billion it owed to Portugal Telecom, leaving the merged company without the capital it had counted on.

On 20 June 2016 Oi filed for recuperação judicial — court-supervised bankruptcy protection — with roughly R$65 billion (about US$19 billion) in debt, the largest such filing in Brazilian history at the time. The restructuring involved more than 55,000 creditors and over 60,000 individual agreements, and the court closed the process in 2022; the company later reported around R$21.2 billion in net debt.

To pay creditors, Oi sold its mobile business in December 2020 to a consortium of rivals Vivo, TIM and Claro for R$16.5 billion, a deal regulators approved in 2022. In February 2023 it filed for Chapter 15 in the United States, and by 2025 a court ordered it liquidated, with about US$6.6 billion still unpaid.