OIBR4

Oi S.A. – In Judicial Reorganization is a Brazilian telecommunications company whose common and preferred shares are traded on B3 under the tickers OIBR3 and OIBR4. Historically, the company has operated in the provision of Switched Fixed Telephone Service (STFC) in the local, domestic long-distance and international long-distance modalities, in addition to Multimedia Communication Service (SCM) throughout Brazil, under concessions and authorizations granted by the National Telecommunications Agency (Anatel). Over its recent trajectory, the company has undergone an extensive operational and financial restructuring process, marked by two major judicial reorganization cycles: the first initiated in 2016 and formally concluded in January 2023, and a new filing in March 2023, which was also extended to its subsidiaries abroad. This sequence of restructurings has reshaped the operator’s business profile, indebtedness and asset base.

The first judicial reorganization process originated in a scenario of high leverage and insolvency risk, leading to the presentation of a plan approved at a creditors’ meeting in December 2017 and ratified in early 2018 by the judge of the 7th Corporate Court of the Rio de Janeiro State Court of Justice. Based on this plan, Oi carried out a capital increase, diluting shareholder concentration and seeking to restore its financial structure, while preparing to redirect investments to new segments, particularly fiber-optic broadband. In 2020, an amendment to the plan established the structural separation of the network infrastructure, paving the way for the sale of assets such as towers, data centers, the mobile operation and part of the fiber infrastructure, while the company focused on businesses considered strategic. Even after the formal closing of the first reorganization, the combination of factors such as difficulties in asset sale operations, the effects of the Covid-19 pandemic and the increase in the cost of capital led to the need for a new judicial reorganization filing in 2023.

The new judicial reorganization, granted in March 2023, covers Oi and its subsidiaries in Brazil and abroad, and involves a restructuring plan that includes debt refinancing, the raising of debtor-in-possession (DIP) financing and the reorganization of the capital structure. Among the relevant financial measures is the hiring, in 2023, of a DIP financing with creditors holding notes issued abroad and with export credit agencies, originally in an amount of up to US$ 275 million, later replaced by a restructured agreement in January 2024 of up to US$ 400 million, with a new cost, term and collateral structure. A significant portion of these operations uses Oi’s equity interest in V.tal – Rede Neutra de Telecomunicações S.A. as collateral, a neutral fiber company in which Oi holds a relevant minority stake. In 2024, V.tal also became the source of a new DIP debenture financing, intended to reinforce working capital and maintenance investments in Oi’s telecommunications activities.

The company’s current business model is organized into three major components: Oi Soluções, the group of wholly owned subsidiaries, and legacy services. Oi Soluções is the strategic core for value generation in the corporate (B2B) segment, acting as an integrator of telecommunications and information and communication technology (ICT) services for large private companies and public entities. The operation combines data connectivity, voice services and a growing portfolio of digital solutions, such as cloud, cybersecurity, managed services, artificial intelligence, internet of things (IoT) and unified communications. This unit has been transitioning from a model focused on traditional connectivity to a broader role as a provider of comprehensive digital transformation solutions, supported by long-term contracts, a broad corporate customer base and an investment profile that is less capital-intensive than the former infrastructure-oriented structure.

The second business component is formed by the wholly owned subsidiaries Serede, Tahto and Oi Services. Serede is dedicated to field services related to the installation, maintenance and support of telecommunications infrastructure and access. Tahto operates call center activities, absorbing a significant portion of customer service and relationship demands from end users and corporate clients. Oi Services, created in the context of the sale of the UPI ClientCo, was structured to provide business process outsourcing (BPO) services in areas such as human resources, finance, information technology, operations and logistics, both for Oi itself and for ClientCo, and with the potential to expand this offering to other companies in the country. These subsidiaries are treated as strategic assets of the group, with value-creation potential in specialized services that go beyond traditional fixed-line telephony activities.

The third component comprises Oi’s legacy services, especially those associated with the former fixed-line concession and the pool of reversible assets. Historically, the company ranked among the largest fixed-line providers in South America, with millions of installed lines and a significant presence in the three regions of the General Concessions Plan (PGO), offering local, domestic and international long-distance services, network interconnection, public telephony and other services associated with STFC. As of December 31, 2024, the company recorded approximately 5.5 million fixed-line accesses and 4.4 million SCM accesses, with a relevant share in the fixed-line and broadband market. Fixed broadband services included technologies such as ADSL2+, VDSL2 and, until early 2025, FTTH and GPON under the “Banda Larga da Oi” brand, a segment that was discontinued at the company after the sale of the Oi Fibra operation and ClientCo, which reinforces its future focus on corporate and legacy services under the authorization regime.

Oi maintains extensive operations in data communication and corporate solutions, both for companies and for other telecommunications operators and internet providers. Standout services include IP virtual private networks (VPN), dedicated internet access, leasing of digital and analog lines, industrial exploitation of dedicated lines (EILD) and dedicated lines for interconnection of third-party networks. The company’s infrastructure includes a long-distance optical backbone with DWDM and OTN technology, with tens of thousands of kilometers of fiber-optic cables connecting state capitals and hundreds of municipalities, as well as metro ethernet and IP/MPLS networks to support high-capacity data applications. In the satellite segment, the company uses capacity on the Amazonas 2 and 3 satellites, operated by Hispamar, to provide voice and data services in C and Ku bands in remote regions, meeting universal service obligations and specific demands such as connectivity in the Fernando de Noronha archipelago and strategic infrastructure projects in border areas.

From a regulatory standpoint, Oi is heavily supervised by Anatel, both due to the nature of its STFC and SCM authorizations and its history as a fixed-line concessionaire. A recent milestone was the approval of the Authorization Term that enabled the migration of the STFC legal regime from the concession model to the authorization regime, with a summary published in November 2024, ending the old concession contracts. This change reduced regulatory obligations and costs associated with meeting concession targets and managing reversible assets, while preserving specific responsibilities such as the provision of STFC in locations without alternative voice services. In parallel, the company became involved in arbitration proceedings and negotiations with Anatel, the Office of the Attorney General of the Union and the Federal Court of Accounts, resulting in the renegotiation of regulatory debts, with a new payment schedule and financial updating, which was reflected in the accounting reassessment of these liabilities and in the attempt to build a more predictable environment for operational continuity.

In governance and risk management, Oi maintains structures aimed at business continuity and the protection of its critical infrastructure. The company operates network operations centers with remote monitoring of failures, performance and security of fixed, data and satellite networks, supporting the provision of voice, data and media services to residential and corporate customers and other operators. The Business Continuity Management System (SGCN), designed in line with ISO 22301, has a multidisciplinary committee that reports to the Audit, Risks and Controls Committee of the Board of Directors, focusing on mitigating the impact of interruption events such as natural disasters, fires and large-scale failures. In parallel, the company states that it is advancing ESG programs, integrating environmental, social and governance concerns into its transformation strategy, in a context of strong financial restructuring and redefinition of investment priorities, with an emphasis on cost efficiency, leaner legacy networks and a focus on the profitability of remaining operations.

In this scenario, Oi positions itself on B3 as a communications company in transition, with operations concentrated in fixed telecommunications services, data communication, digital solutions for the corporate market through Oi Soluções, and a relevant stake in fiber-optic infrastructure through its minority interest in V.tal. The portfolio reshaping, the regulatory migration from concession to authorization and the execution of the new judicial reorganization plan are the central pillars shaping the company’s future trajectory and the performance of OIBR3 and OIBR4 shares in the Brazilian capital market.