CEL rises amid talk of debt restructure.
UPDATE - Iusacell shares jump amid debt restructure talk
Wednesday August 18, 5:16 pm ET
By Cyntia Barrera Diaz
MEXICO CITY, Aug 18 (Reuters) - Shares of Mexico's No. 3 cellular firm, Grupo Iusacell, jumped for the third-consecutive day on Wednesday amid talk that the company is nearing a much-needed debt restructuring, market sources said.
Shares of Iusacell (Mexico:CEL.MX - News) topped the gainers list on Wednesday, up 6.62 percent to 17.55 pesos after gaining as much as 9 percent earlier in the session. Its New York-traded shares (NYSE:CEL - News) rose 6.82 percent to $7.67.
"There is talk about the company renegotiating its debt," said a Mexico City-based trader.
Iusacell, owned by retail and media tycoon Ricardo Salinas, has defaulted on debt obligations over the past year, sparking legal battles with some of its creditors. The company has not been able to renegotiate its debt pile of about $800 million.
A source familiar with Iusacell and debt holders told Reuters this week that the company "is engaged in substantive negotiations with creditors," although the timing of any possible agreement is uncertain.
The source said information was limited because most creditors were bound by strict confidentiality agreements.
Since last Friday, Iusacell shares have gained nearly 26 percent. The company was not available for comment.
Iusacell hired New York-based financial advisory firm Hill Street Capital earlier this year to help it with debt negotiations. Representatives of the boutique firm met with Iusacell in Mexico this week.
Hill Street Capital declined to comment on Wednesday.
A group of creditors filed a suit against Iusacell in January to demand payment on defaulted debt from its main subsidiary Grupo Iusacell Celular.
Last month a U.S. judge ruled that Iusacell will have to continue fighting the lawsuit from those creditors in New York, blocking a bid to bring the case to Mexican courts. |
