The most indebted telecommunications corporation in Brazil, Oi SA, slumped after it announced an unexpected loss and reduction of its dividend payment.

The voting stock of Oi plunged by 8.9% to BRL4.49 at the close in Sao Paulo. Its non-voting shares tumbled by 7.4% to BRL4.13. The history of Ibovespa equity benchmark said Oi's collapse was the worst performance ever.

Two months ago, Oi hired Zeinal Bava as the Chief Executive Officer. Bava decided to cut back on the stockholder payouts to aid in turning the company around. Oi also opted to pay BRL2 billion in dividends through 2016, in contrast with the BRL3 billion it told venture capitalists it would allot in 2014 and 1025.

According to Bava during a conference call with analysts, "(The latest dividend policy) is much more compatible and aligned with the cash-flow profile and the prudent financial approach we want to take in life. It's something that gives the market a floor as to how they should be thinking about dividend in this company in the future."

The carrier's net loss was BRL124.2 million in the second quarter. The data compiled by Bloomberg showed that the said quarter is Oi's initial unprofitable period.