PHAROL, SGPS, S.A.

Major Shareholding Notification • Sep 17, 2016

Announcement | Lisbon | 17 September 2016

Notice to the Market disclosed by Oi

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

PHAROL, SGPS S.A.

Public company Share capital Euro26,895,375 Registered in theCommercial Registry Office ofLisbon and Corporation no. 503 215058 PHAROL is listed on the Euronext (PHR). Information may be accessed onBloomberg under the symbol PHRPL.

Luis Sousa de Macedo Investor Relations Director ir@pharol.pt Tel.: +351 212 697698 Fax: +351 212 697949

Oi S.A.-In Judicial Reorganization CORPORATE TAXPAYERS' REGISTRY (CNPJ/MF) No. 76.535.764/0001-43 BOARD OF TRADE (NIRE) No. 33 3 0029520-8 PUBLICLY-HELD COMPANY

NOTICE TO THE MARKET

Oi S.A. - In Judicial Reorganization ("Oi" or "Company"), in accordance with article 12 of CVM Instruction No. 358/02, informs the market that it has received a letter from CQS Directional Opportunities Master Fund Limited, as transcribed below:

"Dear Sir or Madam,

NOTICE OF material shareholding in Oi S.A.

Name of sharehoder, headquarters and Entity number	Compliance Manager	Other positions at Oi S.A.	Shareholding, Objective and Intention
Name: CQS Directional Opportunities Master Fund Limited ("DOF")	7,405,200 Oi S.A. The preferred shares are held through contracts for difference	1,370,200 Oi S.A. shares are held through contracts for difference
Address: PO Box 309 Ugland House Grand Cayman KYI-1104 Cayman Islands	Percentage: 4.69% of OIBR4 BZ (BROIBRACNPR8) Trading date September 15, 2016	Percentage: 0.20% of OIBR3 BZ (BROIBRACNORI) Trading date September 15, 2016	DOF does not intend to change the control or administrative structure of the company at the present moment
Entity number: MC 149859

Please contact us if you have any questions regarding this notice.

Best regards,

Colin Woods Compliance Manager"

Rio de Janeiro, September 16, 2016.

Oi S.A. – In Judicial Reorganization

Ricardo Malavazi Martins Chief Financial Officer and Investor Relations Officer