Court sides with CEL.
Mexico's Iusacell says court blocks motion
Wednesday July 7, 9:01 pm ET
MEXICO CITY, July 7 (Reuters) - Mexico's debt-laden mobile phone company Iusacell (NYSE:CEL - News; Mexico:CELV.MX - News) said on Wednesday a U.S. court has thrown out a motion to block the company from selling assets which holders of Iusacell debt sought in a bid to recoup $150 million in defaulted debt.
In a one-paragraph statement, Iusacell said the Supreme Court of the State of New York on June 30 denied the motion against Iusacell Celular, the telco's main subsidiary, on grounds of its being "inadmissible and groundless."
Spokesmen at Iusacell, owned by media and retail magnate Ricardo Salinas, were not immediately available for further comment.
Earlier this year, creditors holding around 32 percent of the $150 million Iusacell Celular notes asked the court to stop the company from selling or transferring real estate, communication towers, subscriber agreements or bank accounts to third parties.
Creditors had accused Iusacell of granting preferential treatment to holders of a defaulted $266 million bank loan by paying them interest while denying similar rights to noteholders.
The lawsuit was one of a string of legal woes for Salinas, who is one Latin America's richest men and also a majority owner of Mexico's second-biggest broadcaster, TV Azteca (NYSE:TZA - News; Mexico:TVAZTCACPO.MX - News), and retailer Grupo Elektra (Mexico:ELEKTRA.MX - News; NYSE:EKT - News).
Salinas is under scrutiny from U.S. and Mexican securities regulators because of his involvement in a controversial debt deal at his other mobile phone company, Unefon (Mexico:UNEFONA.MX - News).
When Salinas bought debt-laden Iusacell in mid-2003 he vowed to return it to financial health. But he has not yet announced a full debt restructuring plan.
Iusacell is operating under a heavy debt burden of close to $800 million and for several months has failed to strike a refinancing deal.
Iusacell's debts include a $350 million bond that matures in 2006, the syndicated loan of $266 million and the $150 million bonds.
In June, it defaulted on a $24.9 million interest payment of the $350 million bond. It has also failed to pay $33.2 million in interest on the syndicated loan. |
