‘No chance Brazil’s govt can waive Oi debt’

Bloomberg

Brazil’s government can’t waive Oi SA’s debt with a local regulator and state-run banks, the communications minister said, denying the phone carrier a lifeline that would have helped it pull out of the biggest bankruptcy in the country’s history.
“The govt can’t let go of resources, they are public resources, debt with thepublic administration,” Science and Technology Minister Gilberto Kassab, who also oversees communications, said Sunday in an interview in Barcelona, Spain. The debt with the regulator is Oi’s main problem, Kassab said.
Oi would need a change in legislation to get a reduction in the 20.2 billion reais ($6.5 billion) owed to the government in taxes, fees and fines, Juarez Quadros, head of the telecommunications regulator Anatel, said in January. While creditors and investors are criticizing the size of Oi’s tab and pushing the government to agree to a haircut, Oi’s bankruptcy judge has ordered Anatel and the carrier to go through mediation to sort out payment.
While Kassab has previously signaled that the government could intervene if a solution isn’t found among private stakeholders, on Sunday the minister said he is confident a market solution will be found. “Work is being done to find a solution,” Kassab said.
Separately, Kassab said that the ministry is evaluating a law barring telecommunications providers from also being content producers. The law is expected to be at the crux of the local antitrust watchdog’s review of AT&T Inc.’s acquisition of Time Warner Inc. “I don’t believe we will have problem approving this deal,” Kassab said, adding that it’s not his decision to make.