The story of Oi Telecom: a textbook example of Brazil’s crony capitalism

oi telecom crony capitalism
The debts of Oi Telecom amount to 65bn BRL.

On June 20, 2016, Brazil’s fourth-biggest telecom firm, Oi, filed for court-supervised reorganization. According to Brazilian law, it means that the firm is one step away from bankruptcy and is not able to pay back its 65 billion BRL in debts. Now, Oi will present its creditors with a fifth debt renegotiation plan hoping to save what’s left of the company.

Oi’s proposal includes reducing the financial debt by 50 percent, giving bondholders up to 75 percent of the company’s shares. Last Wednesday, when the terms of the plan were first leaked to the press, Oi’s common shares crashed by...

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