Rio Judge Blocks Emergency Sale of UPI Oi Soluções, Deepening Oi's Liquidity Crisis

A Rio de Janeiro judge has rejected an urgent request from telecommunications operator Oi S.A. (OIBR3, OIBR4) to accelerate the emergency sale of its remaining core assets, including the key B2B unit, UPI Oi Soluções. The ruling blocks the company from immediately raising much-needed capital, which significantly deepens its already acute liquidity crisis and increases restructuring risk for the deeply indebted Brazil telecom. Specifically, the court explicitly halted any second auction of the UPI Oi Soluções at a price below 50% of the unit’s initial R$1.4 billion valuation, mandating that the company consult further with the Public Ministry and the Judicial Watchdog before proceeding with a revised offer structure.

The decision is a major blow to Oi's ability to generate cash needed for near-term operational stability. The mechanism driving the market concern is a lack of working capital: the company recently issued a stark warning to shareholders that it may not be able to sustain operations past August 1 of this year due to severely depleted cash reserves, a situation the court’s intervention now exacerbates. The block comes after the first competitive judicial process for the sale of UPI Oi Soluções in June 2026 failed to attract any bids. Blocking the emergency sale of this unit, which represents a significant portion of its continuing operations revenue, forces Oi to operate with an even tighter cash flow as it navigates its second judicial recovery.

Compounding the problem, the ruling mandated that revenues generated from essential public service contracts must be ring-fenced specifically for payment to suppliers associated with those services. This restriction prevents Oi from diverting that cash for its general liquidity needs or other corporate obligations, effectively neutralizing a source of working capital and signaling the court’s increasing concern over the company’s ability to honor essential contracts.

Oi shares, trading as deeply distressed B3 stocks (OIBR3), reflect the precarious state of the company, with the common shares trading in the range of R$0.13 as of the last close, while preferred shares (OIBR4) are similarly depressed. The failure to secure immediate funding via the asset sale pushes Oi closer to what creditors and analysts have termed "imminent financial chaos". Investors tracking the stock must now watch the immediate clock: the company's self-imposed deadline for operational sustainability is August 1. Further court filings regarding an updated sale plan for UPI Oi Soluções, or any appeal to the ring-fencing mandate, will be the next critical data points determining whether the company faces an immediate declaration of bankruptcy.