Mexican fixed-line telco Axtel is reportedly looking to raise US$300m by selling towers or fibre infrastructure to avoid defaulting on its debt.
Axtel needs to make US$66m in interest payments in the next eight months, despite only having around…
Mexican fixed-line telco Axtel is reportedly looking to raise US$300m by selling towers or fibre infrastructure to avoid defaulting on its debt.
Axtel needs to make US$66m in interest payments in the next eight months, despite only having around US$62m in cash reserves, reported Bloomberg citing a company official.
The company plans to rent the assets it sells under a sale-leaseback deal, added the report.
Axtel was unable to comment before the press deadline.
Posting total debt at the end of Q2 2012 on 26 July, Axtel listed Ps3.76bn (US$287m) in 2017 senior notes and Ps6.7bn (US$511m) in 2019 senior notes.
It also listed Ps824m (US$63m) in bank facilities. Some of the banks that syndicated Axtel’s loan, due 2015, are providing advice on the possible sale of assets, according to Bloomberg. The banks on the loan are Citigroup, Banamex, Grupo Financiero Banorte, Credit Suisse, ING and Standard Bank.
In addition, Axtel also reportedly has access to US$40m through its revolving credit facility.
On 10 August, Standard & Poor’s downgraded Axtel’s debt one notch to CCC+, citing heavy competition in the Mexican market.
“The downgrade reflects our concerns regarding Axtel’s liquidity, which we now assess as weak, especially its ability to meet its 2013 coupon payments and higher-than-expected working capital needs from payments due from government and its still high, though decreasing, capital expenditures,” stated the ratings agency.
“We believe Axtel could need another amendment to its revolving credit facility in the near term, if EBITDA further deteriorates or if the Mexican peso continues to depreciate.”
Axtel reported Q2 2012 revenues unchanged on the year at Ps2.7bn (US$205m). It posted a 25% fall in Q2 2012 adjusted EBITDA to Ps703m (US$54.5m), compared with the corresponding period last year.
