China Telecom is eyeing a BRL20 billion ($6 billion) deal to acquire a majority stake in troubled Brazil operator Oi, Reuters reported.

Unnamed sources quoted by the publication said the deal is partly dependent on Oi, which is set for a crunch meeting with creditors on 10 November, resolving its ongoing debt issues.

Last week, news broke representatives from China Telecom and US private equity company TPG Capital met with government officials in capital city Brasilia to discuss a potential takeover of the debt-laden company.

As part of its bid, China Telecom is reportedly offering to construct a fibre network to more than 2,000 principalities – potentially handing a huge boost to the country’s roll-out of high speed broadband.

Debt issues
Late last week Oi’s board approved its latest debt restructuring proposal which is set to be presented to creditors later today, ahead of a vote on the future of the company in the forthcoming creditor meeting.

Its previous bid to appease creditors was rejected in October by a committee of bondholders. Oi management then rejected a counter proposal from creditors holding liabilities worth BRL23 billion, Reuters said.

The group wanted 88 per cent equity in the operator in exchange for its debt, which makes up around a third of the BRL65.4 billion owed by the company.

Oi has been in trouble for some time and filed for bankruptcy protection during June 2016. It since attempted to renegotiate its debt and if new proposals are rejected the company could be liquidated.

The operator provides fixed, broadband and TV services in Brazil in addition to being the fourth-largest wireless operator in the country with a mobile base of 40 million connections.