UPDATE 1-Mexico's Unefon, Nortel resolve legal dispute
Mon June 16, 2003 08:20 PM ET
(Adds detail, background throughout, company comment)
MEXICO CITY, June 16 (Reuters) - Mexican mobile telephone company Unefon said on Monday it had resolved legal differences with Canadian telephone equipment company Nortel Networks NT.TO NT.N and reached an agreement to restructure debt.
"Nortel Networks and Unefon have terminated all litigation, released all claims against each other, have signed a new supply contract, and Unefon's debt has been reduced and restructured," Unefon UNEFONA.MX said in a statement.
Unefon paid Nortel $43 million as part of the agreement for debt restructuring. After the payment and other adjustments, the total debt owed by Unefon to Nortel is $325 million, Unefon said.
A private investor group purchased the Unefon debt from Nortel and agreed to a restructuring program with Unefon. The $325 million will now mature on June 15, 2013. Unefon's debt with Nortel was originally due to be paid this year, next year and in 2005.
The two companies also signed a five-year supply contract, calling for an annual target of $40 million in expenditures by Unefon with Nortel and a minimum purchase of $20 million a year.
Unefon, a small Mexican mobile phone operator with some 1.36 million clients, last year defaulted on a $6 million interest payment to Nortel on $350 million in debt.
Soon afterward Unefon filed a lawsuit against Nortel for $900 million in losses and damages, alleging failure to comply with terms of a financing contract.
"These agreements taken together put Unefon in a good position, in terms of once again having a technology supplier as well as giving Unefon a healthy capital structure, said Moises Saba, Unefon's chairman and executive president, who owns 46.5 percent of the firm.
Another 46.5 percent of Unefon is owned by TV Azteca TVAZTCACPO.MX TZA.N and the remaining shares are publicly held. |
