Sao Paulo: Oi SA, the Brazilian phone company struggling under $20 billion in debt, said one of its biggest investors called for a shareholders’ meeting to change the make-up of the board.

Magnate Nelson Tanure’s Bridge Administradora de Recursos Ltda, which holds a 6.6 per cent stake in Oi, said in a filing Thursday it would seek to oust directors who represent Pharol SGPS SA, the Portuguese holding company that’s Oi’s largest shareholder, according to the company’s website. Oi said it’s evaluating the request.

Pharol, which has a 22 per cent stake in Oi, responded in a filing on Friday that the board had adopted necessary measures to protect the phone operator’s assets and overcome the economic and financial crisis it faces.

Board members should be alert to investors that may be “centred on an opportunistic return on their capital and act in order to obtain an advantageous negotiating position,” Lisbon-based shareholder Pharol said in the regulatory filing Friday in Portugal. Any measures that create instability “could cause great material damages to Oi and its image and therefore should be avoided,” it added.

Oi sought protection from creditors after failing to reach a restructuring agreement following a long saga of mergers and leadership changes. A disagreement between Pharol and creditors during the debt restructuring process led to a breakdown in talks that ended with Chief Executive Officer Bayard Gontijo’s resignation last month, people with knowledge of the matter said at the time.

Under Brazilian law, an investor holding more than 5 per cent of a company’s stock can call for a shareholders’ meeting, specifying the subjects to be discussed. If the company fails to comply within eight days, that investor can call the meeting directly. Bridge wants Oi shareholders to replace the board members at the same meeting and also elect two counsellors for empty positions.

Besides targeting directors representing Pharol, Bridge also wants shareholders to oust Marcos Grodetzky, who replaced Robin Bienenstock in June. Bienenstock, a former telecom analyst, had resigned from Oi’s board a few days after Gontijo stepped down.

Opportunity Seen

Bridge originally disclosed a stake in Oi last month, days before the company filed for bankruptcy protection. Tanure, who has a long history of investments in Brazil, has dabbled in telecommunications in the past: He bought Intelig Telecomunicacoes Ltda., a company with a nationwide fibre-optic network, in 2008 and sold it a year later to Tim Participacoes SA.

Tanure is among several prominent investors interested in Oi’s complex bankruptcy. Last month, Egyptian billionaire Naguib Sawiris said he was prepared to invest in the wireless carrier. “Oi needs a shareholder with a strong telecoms background to solve their operational problems in addition to their financial ones,” Sawiris said in an interview following Oi’s bankruptcy filing.

Pharol is the former holding company of Portugal Telecom SGPS SA, which merged with Oi in 2014. The combined company later sold its Portuguese assets to Altice SA, but Lisbon-based Pharol remained a top shareholder in the Brazilian company.

Along with Pharol, Oi’s top shareholders include the state-owned development bank BNDES and BlackRock Inc., according to the phone company’s website and Bloomberg data. The Ontario Teachers’ Pension Plan, one of Oi’s largest holders, sold out its entire position in the company over the course of the past month, according to spokesperson Deborah Allan.

Representatives for BlackRock declined to comment. BNDES didn’t immediately respond to a request for comment.

Shares of Oi rose as much as 4.2 per cent to 1.50 real and were trading at 1.45 at 2:42pm in Sao Paulo.