SAO PAULO, Aug 29 (Reuters) - A Rio de Janeiro court decided that billions of reais in debt the telecom company Oi SA has with Brazil's regulator Anatel should be included in the firm's in-court debt restructuring, Oi said on Tuesday.
The decision, if confirmed, is a blow to Brazil's prosecutor's office, which wanted Oi's debt with the federal telecommunications watchdog to be treated separately and with a different status.
Representatives for the Rio appeals court, which according to Oi confirmed a ruling from a previous court, could not be immediately reached for comment or confirmation.
In an unrelated statement, the company said the Rio de Janeiro court authorized payment to small creditors before the largest ones, as proposed by the phone carrier in May.
Oi's bankruptcy protection case, opened last year, is the largest ever in Brazil with a total debt above 60 billion reais ($18.96 billion) and around 55,000 creditors.
($1 = 3.1647 reais) (Reporting by Leonardo Goy and Guillermo Parra-Bernal; Writing by Marcelo Teixeira; Editing by Sandra Maler)