EX-1 2 ex-01.htm EXHIBIT 1

  

Exhibit 1 

 

 

 

This document is a free translation of the Brazilian judicial administrator’s report referred to June 2020 financial information of Oi S.A. and some of its subsidiaries (“RJ Debtors”) filled within the 7th Business Court of Rio de Janeiro on August, 15, 2020. Due to the complexities of language translation, translations are not always precise. The original document was prepared in Portuguese, and in case of any divergence, discrepancy or difference between this version and the Portuguese version, the Portuguese version shall prevail. The Portuguese version is the only valid and complete version and shall prevail for any and all purposes. There is no assurance as to the accuracy, reliability or completeness of the translation. Any person reading this translation and relying on it should do so at his or her own risk.

 

YOUR HONOR MR. JUDGE OF THE 7th BUSINESS COURT OF THE DISTRICT OF THE CAPITAL OF THE STATE OF RIO DE JANEIRO

Case No. 0203711-65.2016.8.19.0001

Judicial Reorganization of Oi S.A and others

THE JUDICIAL ADMINISTRATOR (Arnoldo Wald Law Firm), appointed in the process of Judicial Reorganization of Oi S.A. and others, respectfully comes to ask Your Honor to determine the addition of the Monthly Activity Report ("RMA") for the month of June 2020.

Rio de Janeiro, August 17, 2020.

 
 

 

     

Judicial Administrator

Arnoldo Wald Law Office

 

 

Pres. Ave. Juscelino Kubitschek, 510,

8th floor | Zip Code 04543-906 | São Paulo, SP

phone: +55 11 3074 6000

 

Almirante Barroso Avenue, no. 52

24th floor | Zip Code 20031-000 | Rio de Janeiro, RJ

phone: +55 21 2272 9300

 

SCN, Block 09, Lot C - Tower C, Room 504 – Asa Sul

Parque Cidade Corporate Building | Zip Code 70308-200

Brasília, DF | phone: +55 61 3410 4700

 

  contato@wald.com.br  

 

 

 

 

 

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EXECUTIVE REPORT

 

1 Introduction 03
2 Organization Chart Oi Group / Companies under Reorganization 05
3 Published Relevant Facts & Notices to the Market 09
4 Financial Information (Consolidated of Companies under Reorganization) 10
  4.1 Cash Flow Statement 11
5 Service to creditors 16
6 Statements submitted by AJ 18
7 Supervision and Compliance with the JR Plan 19
       

 

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1       Introduction

REPORT

EXECUTIVE

    

INTRODUCTION

Your Honor Mr. Judge of the 7th Business Court of the District of the Capital of the State of Rio de Janeiro

The Judicial Administrator, Arnoldo Wald Law Firm ("Wald" or "AJ") appointed in the records of the Judicial Reorganization of the Oi Group (Case No 0203711- 65.2016.8.19.0001) and Rio Branco Consultores Associados, subcontracted by AJ to assist in the preparation of the Monthly Activities Report ("RMA"), respectfully comes before Your Honor pursuant the decision on pages 91.223 / 91,224, to present the RMA for the month of June 2020.

As we know, the Judicial Reorganization involves the following companies:

●Oi S.A. - in Judicial Reorganization ("Oi S.A.");
●Telemar Norte Leste S.A. - in Judicial Reorganization ("Telemar Norte Leste");
●Oi Móvel S.A. - in Judicial Reorganization ("Hi Mobile");
●Copart4 Participações S.A. -in Judicial Reorganization ("Copart4")*;
●Copart5 Participações S.A. -in Judicial Reorganization ("Copart5")*;
●Portugal Telecom International Finance B.V. - in Judicial Reorganization ("PTIF"); e
●Oi Brasil Holdings Coöperatief U.A. - in Judicial Reorganization ("Oi Coop").

This report, which includes financial information based mostly on the elements provided by the Companies under Reorganization up to August 15, 2020, contains data for the month of June 2020, and should be analyzed together with the preliminary activity report, as well as the other RMA's previously presented.

The RMA includes a chapter specifically focused on the consolidated financial information of the Companies under Reorganization, which in this Report will cover the Cash Flow Statement for those months, presented in the tables in comparison with the immediately preceding month, in addition to the information relating to the Balance Sheet and Income Statement of the Companies under Reorganization, the analysis is based on a quarterly comparison between the 2nd quarter of 2020 and the 1st quarter of 2020. The report shall highlight the main variations that have occurred in the period in question, presenting the explanations provided by the Administration of the Companies under Reorganization.

* Copart4 Participações S.A. was incorporated by Telemar Norte Leste S.A. in January 2019, as established in clause 7, annex 7.1 of the PRJ; Copart5 Participações S.A. was incorporated by Oi S.A. in March 2019, as established in clause 7, annex 7.1 of the JR Plan.

 

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1       Introduction

REPORT

EXECUTIVE

    

This report, prepared through analytical procedures and discussions with the Company's Administration, aims to provide the Court and interested parties with information on the financial situation of Companies under Reorganization and the relevant operations performed by them, as well as a summary of the activities carried out by AJ until the close of this report.

The information presented below is mainly based on data and elements submitted by the Companies under Reorganization. The individual financial statements of all Companies under Reorganization, as well as the consolidated financial statements of the Oi Group (which include, but not are limited to the Companies under Reorganization) are audited annually by independent auditors. Limited review procedures are applied by the auditors for the filing with the CVM of the Consolidated Quarterly Financial Information ("ITRs") of the Oi Group. Regarding the individual financial information of each Company under Reorganization, prepared in monthly periods other than those that comprise the ITRs delivered to CVM, these are not subject to independent audit review, either by the auditors hired by the Oi Group or by AJ.

The AJ, honored with the assignment, is available for further clarification on the information contained in this report or other additional information.

Sincerely,

 

  

Arnoldo Wald Filho

awf@wald.com.br

Samantha Mendes Longo

samantha@wald.com.br

Members

Phone: +55 (11) 3074-6000

  

Thiago Fogaça Almeida

Economist

tfa@riobranco.adm.br

Fábio de Carvalho e Mello Curti

Economist

fc@riobranco.adm.br

Phone: +55 (11) 3392 - 3062

 

 

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2       Organization Chart of the Companies in Judicial Reorganization

REPORT

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2       Organization Chart of the Companies in Judicial Reorganization

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2       Organization Chart of the Companies in Judicial Reorganization

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2       Organization Chart of the Companies in Judicial Reorganization

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3       Published Relevant Facts & Notices to the Market

REPORT

EXECUTIVE

    

RELEVANT FACTS & NOTICES TO THE MARKET

Below, we present some of the relevant facts and notices to the market released by the Oi Group that have a direct relationship with the Companies under Reorganization:

Relevant Facts and Notices to the Market of the month of AUGUST /20

13 August - New Version of Amendment to the JR Plan

Oi S.A. - In Judicial Reorganization ("Company"), in compliance with art. 157, paragraph 4 of Law No. 6404/76 ("LSA") and in continuity with the relevant facts disclosed on 28 February and June 15, 2020, communicates to its shareholders and the market in general that, on this date, the Company filed before the 7th Business Court of the District of the Capital of the State of Rio de Janeiro ("RJ Court") updated version of the proposal to add to the confirmed Judicial Reorganization Plan (the "Original JR Plan" and the "Amendment to the JR Plan") with some occasional adjustments.

The full Relevant fact can be accessed at

https://www.oi.com.br/ri/download_arquivos.asp?id_arquivo=7334D4B7-455D-4318-BBB2-4FE4FD2648D2

13 August - Blow Out

Oi S.A. - In Judicial Reorganization ("Oi" or "Company"), in compliance with art. 157, paragraph 4, of Law No. 6,404/76 and the provisions of CVM Instruction 358/02, hereby informs its shareholders and the market in general that it has concluded confidentiality agreements with certain holders of the 10/12% Senior PIK Toggle Notes maturing in 2025 issued by Oi and guaranteed, jointly and severally, by Telemar Norte Leste S.A. - In Judicial Reorganization, Oi Móvel S.A. - In Judicial Reorganization, Oi Brasil Holdings Coöperatief

U.A. - In Judicial Reorganization and Portugal Telecom International Finance B.V. - In Judicial Reorganization ("Confidentiality Agreements" and "Notes", respectively), for the purpose of sharing certain material non-public information ("Confidential Information") to promote the discussions related to the changes of the proposed Amendment to the Plan for Judicial Reorganization ("Plan Amendment") presented before the 7th Business Court of the District of the Capital of the State of Rio de Janeiro ("Judicial Reorganization Court") and a possible change to the deed of issue of the Notes ("Deed of Issue") to enable the completion of the operations provided for in the Addendum to the Plan.

The full Relevant fact can be accessed at

https://www.oi.com.br/ri/download_arquivos.asp?id_arquivo=2EA7087B-4E15-4D96-9C53-7AE942D89835

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4.1 CASH FLOW STATEMENT

Monthly Consolidated of the Companies under Reorganization (unaudited)

REPORT

EXECUTIVE

    

MANAGEMENT CASH FLOW STATEMENT

HIGHLIGHTS

Demonstration
01 to 30 of JUNE of 2020
○(i) Net Operating Cash Generation of the Companies under Reorganization was negative by R$ 69 million in June/20
○Investments reached the level of R$ 512 million in June/20
○Receipts increased by R$ 143 million in June/20, totaling R$ 2,051 million
○Payments presented an increase of R$ 179 million in June/20, reaching the level of R$ 1,609 million
○In June/20 there was a cash inflow of R$ 186 million under the Financial Transactions heading
○The Final Balance of the Financial Cash Balance of the Companies under Reorganization increased by R$ 117 million in June/20, totaling R$ 4,871 million

 

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4.1 CASH FLOW STATEMENT

Monthly Consolidated of the Companies under Reorganization (unaudited)

REPORT

EXECUTIVE

    

 

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4.1 CASH FLOW STATEMENT

Monthly Consolidated of the Companies under Reorganization (unaudited)

REPORT

EXECUTIVE

    

 

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4.1 CASH FLOW STATEMENT

Monthly Consolidated of the Companies under Reorganization (unaudited)

REPORT

EXECUTIVE

    

 

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4.1 CASH FLOW STATEMENT

Monthly Consolidated of the Companies under Reorganization (unaudited)

REPORT

EXECUTIVE

    

 

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4.1 CASH FLOW STATEMENT

Monthly Consolidated of the Companies under Reorganization (unaudited)

REPORT

EXECUTIVE

    

 

  Statement
01 to 30 of JUNE of 2020

Table 2 - Direct Cash Flow

R$ million

CONSOLIDATED COMPANIES UNDER REORGANIZATION AUG/18 SEP/18 OCT/18 NOV/18 DEC/18 JAN/19 FEB/19 MAR/19 APR/19 MAY/19 JUN/19 JUL/19 AUG/19 SEP/19 OCT/19 NOV/19 DEC/19 JAN/20 FEB/20 MAR/20 APR/20 MAY/20 JUN/20
Opening Balance –Cash 4,677 4,721 4,815 4,379 4,362 4,469 7,515 5,943 6,010 4,614 4,306 4,145 3,621 3,083 3,060 2,612 2,239 1,910 3,761 5,929 5,602 4,859 4,754
Receipts 2,659 2,694 2,898 2,815 2,645 2,463 2,400 2,248 2,090 2,815 2,110 2,369 1,991 2,033 2,119 2,013 2,412 2,303 1,782 2,066 1,994 1,908 2,051
Clients 1,731 1,681 1,808 1,807 1,697 1,628 1,541 1,572 1,570 1,660 1,496 1,616 1,511 1,495 1,563 1,473 1,652 1,494 1,353 1,475 1,361 1,455 1,461
Network Usage Services 210 205 204 192 192 177 191 151 6 252 5 43 9 9 8 5 19 6 14 2 3 1 -
Dealers 518 420 414 478 412 498 400 411 427 446 395 453 433 421 443 421 443 488 368 405 387 384 435
Other 200 388 472 338 344 160 268 114 87 457 214 257 38 108 105 114 298 315 47 184 244 70 156
Payments (2,279) (2,276) (2,751) (2,432) (2,285) (2,733) (2,805) (1,821) (2,964) (2,560) (1,743) (2,207) (1,577) (1,471) (1,694) (1,792) (2,082) (2,031) (2,057) (1,669) (2,108) (1,430) (1,609)
Staff (170) (140) (137) (133) (244) (200) (172) (144) (320) (180) (152) (151) (138) (136) (125) (134) (235) (177) (147) (133) (244) (123) (133)
Suppliers of Materials and Services (1,604) (1,640) (2,048) (1,775) (1,508) (1,829) (1,670) (1,239) (1,496) (1,905) (1,112) (1,640) (1,178) (960) (1,273) (1,274) (1,553) (1,646) (1,125) (1,212) (1,494) (1,032) (1,222)
Materials/Services (1,393) (1,433) (1,842) (1,581) (1,315) (1,649) (1,478) (1,087) (1,490) (1,654) (1,105) (1,594) (1,169) (951) (1,264) (1,268) (1,536) (1,640) (1,111) (1,208) (1,489) (1,030) (1,220)
Facility Maintenance (297) (299) (300) (347) (425) (406) (344) (305) (324) (322) (331) (336) (348) (329) (339) (371) (393) (357) (287) (291) (302) (262) (243)
Rentals (349) (329) (336) (338) (297) (401) (438) (273) (407) (432) (255) (424) (292) (194) (368) (311) (254) (424) (336) (324) (338) (306) (344)
Data Processing/ Printers (122) (103) (134) (129) (97) (134) (122) (108) (139) (94) (99) (126) (94) (10) (28) (156) (185) (185) (66) (77) (111) (80) (69)
Call Center Service /Collection (138) (104) (138) (147) (163) (129) (155) (113) (135) (138) (121) (116) (128) (124) (103) (125) (143) (112) (134) (110) (79) (83) (85)
Dealers (108) (109) (112) (116) (110) (115) (115) (105) (100) (109) (99) (103) (98) (102) (101) (103) (99) (103) (128) (99) (103) (95) (102)
Consultancy / Audits / Fees (71) (45) (96) (74) (52) (124) (50) (34) (76) (42) (24) (71) (41) (25) (39) (32) (31) (76) (95) (47) (41) (43) (43)
Other Services/Payments (308) (444) (726) (430) (171) (340) (254) (149) (309) (517) (176) (418) (168) (167) (286) (170) (431) (383) (65) (259) (515) (163) (335)
Network Usage Services (211) (207) (206) (194) (193) (180) (192) (152) (6) (251) (7) (46) (9) (9) (9) (6) (17) (6) (14) (4) (5) (1) (2)
Taxes (487) (516) (551) (543) (523) (683) (566) (524) (1,221) (500) (501) (478) (407) (400) (384) (404) (368) (402) (365) (365) (392) (323) (329)
Judicial Deposits 46 40 41 55 75 34 51 91 78 41 32 71 153 29 88 33 86 200 41 47 29 55 81
Contingencies - (4) (2) (1) (12) (5) (6) (5) (5) (16) (10) (9) (7) (4) - (13) (12) (6) (4) (6) (6) (7) (6)
Mediation/ Partner Suppliers (64) (16) (54) (35) (73) (50) (442)                       (457)        
Investments (363) (339) (582) (421) (344) (603) (482) (384) (540) (672) (544) (702) (656) (592) (881) (596) (661) (685) (748) (693) (660) (591) (512)
Telemar (178) (147) (222) (193) (174) (234) (208) (172) (230) (279) (206) (245) (232) (215) (245) (212) (185) (195) (195) (192) (262) (176) (196)
Oi S.A. (47) (64) (76) (58) (46) (103) (83) (51) (81) (99) (54) (83) (61) (62) (88) (54) (62) (66) (88) (83) (60) (89) (63)
Oi Móvel (138) (128) (284) (170) (124) (266) (191) (161) (229) (294) (284) (374) (363) (315) (548) (330) (414) (424) (465) (417) (338) (326) (252)
 
Operational Cash Generation 17 79 (435) (38) 16 (873) (887) 43 (1,414) (417) (177) (540) (242) (30) (456) (375) (331) (413) (1,023) (295) (774) (113) (69)
 
Capital Increase   -       4,007   -           -           -      
Pharol Agreement           (106)                                  
Non Core - - - - - - - - - - - - - - - - - - 121 - - - -
Intra-Group Transactions (1) - - - 14 - - - - 100 - - - - - - - - - 17 - - -
Financial Operations 28 15 (1) 21 23 18 (685) 24 17 9 16 16 (296) 7 8 2 2 2,264 3,070 (48) 31 8 186
Dividends and Interest on Net Equity (JCP) - - - - 54 - - - - - - - - - - - - - - - 0 - 0
 
Closing Balance –Cash 4,721 4,815 4,379 4,362 4,469 7,515 5,943 6,010 4,614 4,306 4,145 3,621 3,083 3,060 2,612 2,239 1,910 3,761 5,929 5,602 4,859 4,754 4,871

 

 

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5       Service to creditors

REPORT

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SERVICE TO CREDITORS

Last month, the Judicial Administrator continued to dedicate itself to the organization of the new General Creditors' Meeting that will be held to debate the proposal of the Judicial Reorganization Plan, in accordance with the terms of the decision rendered at pages 425,465/425,471.

Among the works for the new GCM is the preparation of the list of creditors with voting rights, as well as the examination and validation of the documentation that has already been submitted by creditors who wish to attend the meeting through the online accreditation platform (http://www.recuperacaojudicialoi.com.br/agc/). As it occurred at the Meeting held in 2017, creditors will be able to exercise their right to vote without the need to travel (https://www.credor.oi.com.br/).

During the month of July, this Administration followed the mediation procedure established under the terms of the decision at pages 444.047/444,051 with the aim of stimulating a composition among financial creditors and of relevance (over R$ 500 million) and the debtors, related to the conditions of the proposed Amendment to the JR Plan.

In relation to the current claims, AJ remains focused on clarifying doubts about mediation procedures, clauses and compliance with the confirmed Judicial Reorganization Plan, being constantly contacted by national and international creditors, either by phone on +55 (21) 2272-9300, or by e-mail credoroi@wald.com.br.

Throughout the month, this Administration also followed the mediation procedure related to the procedural incidents, in accordance with the decision at pages 341,970/341,973. This mediation aims to encourage a composition between creditors and debtor for the definition of the value of the credits, from an online platform, which already has 11,952 signed agreements.

This Administration makes available on the site of the Judicial Reorganization the list of procedural incidents sentenced, which is periodically updated.

In addition, AJ remains assisting this Hon. Judge in the organization of the numerous letters received from other Judges requesting authorization to carry out the constriction of property of the Companies under Reorganization for payment of post-petition claims, in a procedure that, on the one hand, unites speed and security for the benefit of the Creditors, and, on the other, allows the recovery of the Oi Group to be set up and the JR Plan to be complied with.

 

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5       Service to creditors

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SERVICE TO CREDITORS

For this purpose, this Administration makes it available monthly on the Judicial Reorganization site (www.recuperacaojudicaloi.com.br), which already has 1,654,896 accesses, the list of letters received from the notary's office of the 7th Business District - more than 27,000 requests having already been processed - and the credits paid by the Oi Group.

 

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5       Service to creditors

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SUMMARY OF THE STATEMENTS OF AJ IN THE RECORDS

Below, the AJ lists the manifestations presented in the records of the electronic process after the last Monthly Activity Report, with the indication of the respective pages.

Pages 448.931/448.962 Monthly report of the activities carried out by Companies under Reorganization (for the month of May 2020). 07.15.2020
Pages 453.932/453.936 AJ statement on the preparations and adoption of the necessary security measures for the holding of the new AGC. 07.27.2020
Pages 459.650/459.652 AJ's statement on the date for the new AGC and the prior procedures to be followed by creditors wishing to attend the meeting. 08.11.2020
Pages 462.726/462.729

AJ Manifestation on:

(i) the petition of the Companies under Reorganization about the payment of extra-curricular claims;

(ii) the decision by the Board of Directors of the National Telecommunications Agency - Anatel;

(iii) the delayed qualifications presented by Kilson Araujo Lima Junior and by Novas Mídias Digitais Programadora Ltda and (iv) the numerous requests for payment of post-petition claims.

 08.13.2020

 

In addition, in response to letters and requests addressed directly to the AJ by the most diverse Courts in the country, the Judicial Administrator presented several statements in cases filed against the Companies under Reorganization.

 

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5       Service to creditors

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THE SUPERVISION OF COMPLIANCE WITH THE JUDICIAL REORGANIZATION PLAN

The Judicial Reorganization Plan ("JR Plan") presented by the Companies under Reorganization was approved by the Creditors present at the General Meeting of Creditors held on 19.12.2017, being approved, with exceptions, by this Hon. Judge, according to the r. decision of pages 254,741/254,756.

Thus, this Administration remains focused on the supervision of the fulfillment of the obligations by the Companies under Reorganization of the confirmed JR Plan, having, for this purpose, held periodic meetings with the Company and reviewed all relevant documentation.

As a result of this supervision, AJ informs that, in June 2020, only the obligations that have a maturity linked to the transit in res judicata of the records of origin have expired, as established in the Judicial Reorganization Plan. Finally, it must be informed that, every month, this Administration receives the list of labor credits paid during the month, due to the end of the grace period (180 days from the date of res judicata of the original lawsuit - clause 4.1.1 of the JR Plan).

 

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Franklin Roosevelt Avenue, Juscelino Kubitschek Avenue,
no. 115, 4th floor no. 510, 8th floor
ZIP CODE 20021-120 ZIP CODE 04543-906
Rio de Janeiro, RJ - Brazil São Paulo, SP - Brazil
   
   

 

  Marquês de São  
  Vicente Avenue, 446 - Conj. 1206  
  Barra Funda  
  ZIP CODE 01139-000  
  São Paulo, SP - Brazil  

 

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