Unefon and Nortel kiss and make up

18 Jun 2003

Unefon [Mexico: UNEFONA], Mexico’s fourth cellco, has reached a deal with its supplier Nortel Networks [NYSE: NT] to restructure the operator’s USD368 million debt and drop its USD900 million lawsuit against the vendor. The companies have been at loggerheads since last year when Unefon launched the suit to try and claim damages for Nortel’s alleged failure to deliver equipment. The deal means that Unefon will pay Nortel USD43 million of its outstanding debt up front with the remainder sold to a group of investors. The two have also signed a new five-year supply contract thought to be worth between MXP20 million and MXP40 million a year. The restructuring of Unefon’s debt now paves the way for its parent company Biper to merge the operator with Iusacell [NYSE: CEL], the country’s second largest cellco which it took control of this month, to provide a more effective rival to the market’s runaway leader, TelCel.