Maxcom starts restructuring, capital injection talks with private equity firm

19 Jun 2013

Mexican alternative fixed line provider Maxcom Telecomunicaciones has confirmed it is in negotiations aimed at restructuring its debt and arranging a capital injection, with the telco said to be using a 30-day grace period for an USD11 million interest payment that was due this week. According to the Wall Street Journal, Maxcom has entered into talks with private equity firm Ventura Capital Privado and certain shareholders with a view to negotiating terms of a possible restructuring.

As previously reported by CommsUpdate, in December 2012 Maxcom approved an MXN764 million (USD59 million) takeover bid by Ventura Capital, under the terms of which the private equity firm offered to pay MXN2.90 (USD0.23) per share for the entire holding in Maxcom, with the operator’s board and investors – which represent 44% of outstanding stock – approving the deal at that date. However, with Ventura having subsequently launched a public tender for Maxcom’s shares, the Mexican operator revealed in April 2013 that only 61.93% of old notes were tendered in a bond exchange, not enough to complete a swap, which was a requirement for an equity offer from Ventura Capital. In the wake of the deal’s collapse Maxcom noted: ‘In light of this outcome, Maxcom is considering all of its alternatives including, but not limited to, commencement of a Chapter 11 case or other restructuring proceeding.’

In line with this, Maxcom has now confirmed it is seeking a pre-packaged debt restructuring and a capital injection of USD45 million, warning that failure to reach an agreement could push it into bankruptcy proceedings.

Mexico, Maxcom