SAO PAULO, May 16 (Reuters) - A New York court is set to hear a dispute involving Brazilian telecoms company Oi SA and major shareholder Bratel Brasil SA, Bratel said in a statement on Wednesday, as shareholder discontent with Oi's bankruptcy recovery process shows no signs of abating.
On Friday, Bratel, a subsidiary of Portugal's Pharol SGPS SA , which owns almost 28 percent of Oi's common shares, said it had filed a legal complaint in the United States. The complaint alleges that the rights of Oi shareholders were violated as part of an agreement approved by creditors in December to severely dilute shareholders' equity as part of an agreement to take Oi out of bankruptcy protection.
In the Wednesday statement, Bratel said Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York had scheduled a hearing for May 29.
Representatives for Oi did not immediately respond to a request for comment, though the company has repeatedly said the recovery plan is legally airtight.
In December, creditors in Oi approved a plan to restructure some 65 billion reais ($17.7 billion) in debt which will result in shareholders' equity being diluted by 72 percent. Shareholders vigorously objected, especially as the company's board was effectively removed from the process shortly before the vote.
That dilution process, in which debt will be converted into equity, has not yet occurred, though executives have told Reuters they hope to complete the process before the end of June.
That has resulted in several legal challenges.
Common shares in Oi, which have become extremely volatile in recent months, climbed 6.3 percent to 4.22 reais in afternoon trade, while preferred shares were up 2.8 percent at 3.36 reais.
($1 = 3.68 reais) (Reporting by Gram Slattery; Editing by Lisa Shumaker)