Mexico's Iusacell battles to restructure debt pile
biz.yahoo.com
Reuters
Friday May 30, 1:48 pm ET
By Pablo Garibian
MEXICO CITY, May 30 (Reuters) - Iusacell, Mexico's third largest
mobile phone operator, continues in talks with creditors to
restructure a suffocating $814 million in debt, the company's
finance director told Reuters on Friday.
Iusacell, whose main
shareholders are Verizon
Communications Inc.
(NYSE:VZ - News) and
Vodafone Group Plc
(London:VOD.L - News), has
outstanding a $266 million
syndicated bank loan, $350
million in bonds due 2006
and another $150 million in
notes maturing next year,
plus other smaller debts.
"We continue to work with our creditors, preparing various
scenarios," said Russell Olson. "We are trying to work more with
our 2006 bond holders."
Olson said in the next few weeks Iusacell (NYSE:CEL - News;
Mexico:CELV.MX - News) hoped to announce a restructuring
deal, but for the moment he said he was unable to release
details.
Iusacell has lost market share in recent months against stiff
competition, which has raised eyebrows among analysts.
S&P CUT RATING
Standard & Poor's on Tuesday reduced its credit rating on
Iusacell's debt to "CC" from "CCC+" on worries that the company
could possibly fail to pay a $25 million coupon due on Sunday
from its 2006 bond.
S&P said at the end of March Iusacell had about $5 million in
cash and limited credit line availability.
Olson said that cash on hand has now risen to more than $15
million and that if the company did not pay the interest coming
due over the weekend, it would technically not be in default.
"Technically, we have 30 days after the due date before being in
a situation of default, that being the hypothetical case of not
paying," Olson said.
At the end of April, Iusacell was forced to increase the number of
local shares in the share group that represents its American
Depositary Receipts to avoid being delisted because the ADR
price had fallen below the minimum price required.
Shares of Iusacell, which has around 2.1 million subscribers, on
Friday were trading up 2.35 percent at 0.435 pesos on the
Mexican bourse. Its ADRs were down 1.19 percent at $4.15. |
