SAO PAULO/LISBON (Reuters) – The chief executive of Oi SA has resigned, its largest shareholder said on Friday, as the Brazilian telecommunications firm enters a crucial phase in Latin America’s biggest-ever bankruptcy proceedings.

The headquarters of the Brazil’s largest fixed-line telecoms group Oi, is pictured in Rio de Janeiro, Brazil, June 22, 2016. REUTERS/Sergio Moraes

A spokeswoman for Portugal’s Pharol SGPS SA, which owns about 27.5 percent of Oi’s voting shares and is part of a controlling shareholder bloc, said it had been informed of Marco Schroeder’s resignation.

The move reflects deepening fissures between Oi’s management and board, run by shareholders aligned with distressed debt tycoon Nelson Tanure. Schroeder has called in recent months for both shareholders and creditors to make concessions, while the board has stuck to a restructuring proposal rejected by major bondholder groups.

An Oi spokeswoman declined to comment. Three sources with knowledge of the situation told Reuters earlier on Friday that Schroeder had offered to resign.

Common shares in Oi extended losses after the Reuters report, closing 4 percent lower.

Oi is two weeks away from a crucial creditor vote on a proposal to restructure 65 billion reais ($20 billion) of debt, with the fate of the nation’s largest fixed-line phone operator at stake and more than 100,000 jobs on the line.

In October, telecoms regulator Anatel had threatened to intervene in the carrier if it changed management.

However, a government source said Schroeder’s departure on Friday did not make intervention more likely. The person, who requested anonymity due to the sensitivity of the issue, said that talks to bring the debt-laden carrier out of bankruptcy protection will continue under new management.

Any restructuring plan approved by management must still be approved by the regulator before being presented in bankruptcy court, the person added.

Reporting by Tatiana Bautzer and Gram Slattery in Sao Paulo, Daniel Alvarenga in Lisbon; Additional reporting by Leonardo Goy in Brasilia; Editing by Brad Haynes and Cynthia Osterman

Our Standards:The Thomson Reuters Trust Principles.

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