PHAROL SGPS S A : informs Material Fact disclosed by Oi - New blow out material from discussions with creditors

Announcement | Lisbon | 3 March 2023

Material Fact disclosed by Oi

PHAROL, SGPS S.A. hereby informs on the Material Fact disclosed by Oi, S.A., according to the company's announcement attached hereto.

Oi S.A. - In Judicial Reorganization

CNPJ/ME No. 76.535.764/0001-43

NIRE 33.3.0029520-8

Publicly-Held Company

MATERIAL FACT

Oi S.A. - In Judicial Reorganization ("Oi" or "Company"), in accordance with Paragraph 4 of Article 157 of Law No. 6.404/1976 and the provisions of the Brazilian Stock and Exchange Commission ("CVM") Resolution No. 44/21, and further to the Material Fact dated October 27, 2022, December 31, 2022 and February 2 and 3, 2023, hereby informs its shareholders and the market in general that, after several discussions and negotiations involving a potential restructuring of certain debts of the Company, as of the date hereof, the Company has reached an agreement with a group representing the majority of (i) holders of 10%/12% Senior PIK Toggle Notes due in 2025 issued by Oi, on July 27, 2018, and guaranteed, jointly and severally, by Telemar Norte Leste S.A.

• In Judicial Reorganization, Oi Móvel S.A. - In Judicial Reorganization, Oi Brasil Holdings Coöperatief U.A. - In Judicial Reorganization and Portugal Telecom International Finance B.V. - In Judicial Reorganization ("Noteholders"); and (ii) lenders of loans to the Company deriving from Export Credit Agencies agreements ("ECA Holders" and, with the Noteholders, the "Financial Creditors"), on the principal commercial terms and conditions for a restructuring of certain debts of the Company and long-term financing to be provided to support the Company's ongoing operations (the
  "Proposed Restructuring"). The Company believes that the Proposed Restructuring will comprehensively enhance its balance sheet and deliver long-term value to all Oi stakeholders.

The principal terms of the Proposed Restructuring are set out in the term sheet attached to this Material Fact (the "Restructuring Term Sheet").

The Proposed Restructuring also contemplates a potential interim "debtor in possession" financing facility, as permitted by Law No. 11,101/05, in the amount of US$ 275,000,000.00 (two hundred and seventy five million dollars) (the "DIP Financing"), which is expected to be provided by certain Financial Creditors, to address the Company's short-term funding needs, before the long term financing included in the

agreement can be accessed. The principal terms of the DIP Financing are set out in the term sheet attached to this Material Fact (the "DIP Term Sheet" and together with the Restructuring Term Sheet, the "Term Sheets").

As set out in the Term Sheets, the detailed final terms of Proposed Restructuring, including the final terms of DIP Financing, are subject to a number of conditions, including, without limitation, (i) the agreement of the definitive documentation necessary or desirable to implement the Proposed Restructuring, and (ii) the approval by the 7th Corporate Court of Justice of the Capital of the State of Rio de Janeiro.

The Company also intends to enter into a restructuring support and lock-up agreement with the majority of the Financial Creditors (respectively, the "RSA" and the "RSA Creditors"), to facilitate the implementation of the Proposed Restructuring. Pursuant to the terms of the RSA, the RSA Creditors will agree to support and vote in favour of a pre- agreed Judicial Recovery Plan consistent with the Term Sheets (or more detailed forms thereof) to be submitted by the Company in the context of the process of judicial reorganization of the Company and its subsidiaries Portugal Telecom International Finance B.V. - In Judicial Reorganization and Oi Brasil Holdings Coöperatief U.A. - In Judicial Reorganization, filed yesterday before the 7th Corporate Court of Justice of the Capital of the State of Rio de Janeiro ("Judicial Reorganization"), as set forth in the Company's Material Fact disclosed earlier today.

Given the level of indicative support for the Proposed Restructuring received to date, the Company is very confident it will present a viable Judicial Recovery Plan to implement the Proposed Restructuring in a manner satisfactory to all stakeholders in the near term.

In connection with the negotiations of the Proposed Restructuring, the Company and its representatives and legal and financial advisors (collectively the "Company's Representatives") have shared certain non-public material information ("Confidential Information") with certain Financial Creditors and their legal and financial advisors (collectively the "Financial Creditor Representatives"), as well as held meetings with relevant Financial Creditors and Financial Creditor Representatives.

Pursuant to the terms and conditions of the Confidentiality Agreements entered into by the Company with the relevant Financial Creditors, the Company has agreed to make public certain Confidential Information provided by the Company and/or Company Representatives to the relevant Financial Creditors in connection with discussions to agree the terms of the Proposed Restructuring ("Materials").

The Materials consist of the presentations and other documents and information prepared by the Company and/or Company Representatives in relation to the Proposed Restructuring, which are attached to this Material Fact.

The Materials and the Term Sheets can also be found in the attachment to this Material Fact.

All information contained in the Materials and the Term Sheets was accurate on the date of delivery by the Company and the Company's Representatives to the Financial Creditors and the Financial Creditor Representatives, has not been updated since the date of delivery and shall not be used for any purpose other than the ones necessary for the implementation of the Proposed Restructuring. The information included in this Material Fact, the Term Sheets and the Materials made available are being made public to comply with the Company's disclosure obligations provided for in the referred Confidentiality Agreements.

As part of its efforts to restructure its future obligations, the Company also discloses through this Material Fact it has received from V.tal, yesterday, a binding plan support proposal, in connection with its Long-Term Lease Agreement Contract "Take-or-Pay" credits originally from Globenet ("LTLA") against the Company. This plan support proposal indicates V.tal's commitment to adhering to a proposed Judicial Recovery Plan, by extending the company a 50% discount on all future LTLA obligations from 2025 to 2028, provided certain conditions are met. Amongst those conditions, the payment of 44% of the remaining post discount credits should be paid by payments in kind, through an agreement to receive a minimum volume of decommissioned cable network infrastructure, along with the responsibility for all of the costs of extracting and monetizing them, and which the company would otherwise sell as scrap. All other credits should continue to be paid according to their original schedule from 2025 to 2028, with the committed discounts already applied. This proposal will be analyzed by the Company, as it potentially signals a very significant reduction of Oi's future non-financial liabilities, being aligned with the restructuring plan objectives.

The Company will continue the negotiations with, amongst others, the Financial Creditors in order to implement the agreement and execute the definitive documents, and will keep its shareholders and the market in general informed of any development regarding the subject matter of this Material Fact.

Rio de Janeiro, March 2, 2023.

Oi S.A. - In Judicial Reorganization

Cristiane Barretto Sales

Chief Financial and Investor Relations Officer

Note Regarding Forward-Looking Statements:

This Material Fact contains forward-looking statements. Statements that are not historical facts, including statements of Oi's beliefs and expectations, business strategies, future synergies, cost savings, future costs and future liquidity, are considered forward-looking statements. The words "will", "shall", "would", "should", "anticipates", "intends", "believes", "estimates", "expects", "anticipates", "plans", "targets", "purpose", "projects", "forecasts" and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. There is no guarantee that the expected events, tendencies or expected results will actually occur. Such statements reflect the current view of Oi's management and are subject to various risks and uncertainties. These statements are based on several assumptions and factors, including general economic and market conditions, industry conditions, corporate approvals, operating factors and other factors. Any changes in such assumptions or factors could cause material differences between the actual results and current expectations. All forward-looking statements attributable to the Company or its affiliates, or people acting on their behalf, are expressly qualified in their entirety by the cautionary notices set forth in this paragraph. Undue reliance should not be placed on these statements. Forward-looking statements only speak as of the date on which they were made. Except as otherwise required by the Brazilian securities legislation and the rules and regulations of the CVM, or applicable regulatory authorities of other countries, the Company and its affiliates do not have any intention or obligation to update or publicly announce the results of any revisions to any of its forward-looking statements to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting forward-looking statements. However, it is advisable to consult other disclosures made by the Company on matters related to reports and communications filed by the Company within the CVM.