The president of Brazilian regulator Anatel has said that cash-strapped Oi cannot dispose of its stake in its fiber firm V.tal.
Carlos Baigorri made the comments to journalists, noting that Oi cannot consider doing so while it uses some of the concession’s reversible assets, as reported by Comms Update.
Oi must instead stay true to the agency’s resolution 101/99, which defines a controlling company as an entity that's entitled to at least one seat on the board of directors, can appoint directors, and can veto bylaws or contracts.
"A dilution of V.tal is possible, but it cannot be such that Oi ceases to be the company’s controlling shareholder," said Baigorri.
His comments follow rumors in recent months that Oi has been considering cashing in on its fiber assets to ease its debt situation.
It also comes just weeks after Anatel set up a working group to monitor the operational and financial situation at Oi.
The Brazilian operator only recently exited bankruptcy protection for the first time in six years after filing for bankruptcy back in 2016 with debts of R$65 billion (US$19bn).
V.tal was spun off from Oi last year, with Oi's stake thought to be around 30 percent. V.tal operates a terrestrial optical fiber network that spans 450,000km and connects more than 2,380 municipalities in the country.
In November of last year, Canada's Pension Plan Investment Board agreed to pay R$2.5bn ($462 million) for a 9.5 percent stake in the new company.
Last week, TIM Brasil revealed it has struggled to shift base stations it acquired as part of its three-way takeover of Oi Móvel, despite these assets being discounted by up to 75 percent.