Oi Brazil bankruptcy ruling confirmed

Details: Vaughan O'Grady; Category: Operators; 27 August 2026; 625 views

The troubled tale of Brazilian operator Oi took a not unexpected turn this week as a Brazilian court upheld an earlier bankruptcy ruling, putting an end to Oi's attempt at court-supervised restructuring.

Earlier this week a Rio de Janeiro appeals court not only upheld last year’s bankruptcy ruling but also rejected appeals filed by financial services companies Itau Unibanco and Bradesco, both creditors of Oi.

The bankruptcy covers Oi and a number of subsidiaries. What this seems to mean is that the group will be allowed to continue operating temporarily to prevent the disruption of essential services while court-appointed administrators oversee asset sales and payments to creditors.

While Itau and Bradesco wanted court-supervised restructuring to continue, not only to avoid reducing creditor recoveries but also to avoid disrupting services, the court, felt, in line with the earlier ruling, that Oi was no longer able to comply with its restructuring plan.

As we have reported in the past, Oi’s issues included payment delays, difficulties funding its operations and setbacks in completing planned asset sales (although some assets have been sold).

Appointments have been made to oversee the bankruptcy proceedings, including the liquidation of the group’s remaining assets. There will be a temporary continuation of operations while the court determines which assets can be sold and how the proceeds will be distributed among creditors.

This decision seems to bring to an end a more-than-decade-long saga that began with Oi’s first restructuring case in 2016, which seemed to conclude hopefully in 2022. It didn’t. Oi returned to court less than a year later with vast debts.

Creditors may have a tough time getting some of their money back, but, as the Brazil Stock Guide website says, for shareholders, the ruling leaves virtually no prospect of recovering value.