Mexico Pegaso PCS seeks $400 mln,7-yr loan - executive
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MEXICO CITY, July 4 (Reuters) - Mexican wireless phone company Pegaso PCS, in which U.S. firm Leap Wireless International Inc. <LWIN.O> holds a 28.6 percent stake, plans to obtain a $400 million, 7-year syndicated loan, an executive involved in the deal told Reuters on Tuesday.
Morgan Stanley Dean Witter and Bank of America have already received the mandate for the loan.
"We are just beginning the negotiations with the arrangers," the executive, who did not want to be identified, told Reuters. "The deal is at a very early stage, we just began to contact banks yesterday ... details of the deal are not likely to come out until the end of month."
The executive did not say if only foreign banks would provide the funds for the $400 million loan.
A Pegaso spokeswoman said she had no information while Leap Wireless officials could not be reached for comment.
Use of the loan proceeds was still unknown, but sector analysts said it was very likely that Pegaso would use them to keep expanding the company's network in Mexico.
Alejandro Burillo, head of Pegaso PCS, sold last month his 25.1 percent stake in Grupo Televicentro, the holding company of No. 1 Spanish-speaking media giant, Mexico's Grupo Televisa <TLEVISACPO.MX> <TV.N> to a group of investors.
Under that deal, Televisa also agreed to sell Burillo a 12.1 percent stake it had in Pegaso for $126 million in cash and Televisa shares. Televisa is no longer a Pegaso partner.
As of early May, Pegaso said it had 250,000 cellular users in the four cities where it currently offers its personal communication services, known as PCS: Mexico City, Tijuana, Monterrey and Guadalajara.
By the end of the year, the company expects to boost its client base to one million subscribers
Late in May, Pegaso launched its Internet access service via wireless phones in a move to keep up with competitors Telcel, a unit of the country's No. 1 phone company Telefonos de Mexico <TELMEXL.MX> <TMX.N>, and Nuevo Grupo Iusacell <CELV.MX> <CEL.N>, Mexico's second biggest cellular company.
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