Investment firm Fintech has made a bid for all of Telecom Argentina’s listed Class B shares. Fintech, led by low-profile Mexican financier David Martínez Guzmán, said in a stock exchange filing that it had offered Ps46 (US$3.02) per share.
Investment firm Fintech has made a bid for all of Telecom Argentina’s (BCBA:TECO2) Class B shares.
Fintech, led by low-profile Mexican financier David Martínez Guzmán, said in a stock exchange filing that it had offered Ps46 (US$3.02) per share for the 45.23% stake of the company listed in Buenos Aires. The offer does not include Class C shares, equivalent to 0.03% of the shareholding.
The offer period will run for 20 working days from 24 February, with an additional five working days if needed.
The transaction is subject to approval by Enacom, the depoliticised TMT regulator created to replace AFTIC in January 2016, and the national antitrust authority.
The offer is separate from Fintech’s ongoing offer for the stake indirectly owned by Telecom Italia (BIT:TIM), which was last year blocked by telecoms regulator AFTIC, a TIM spokesperson confirmed.
AFTIC, which had been seen as heavily influenced by former Argentine president Cristina Fernández de Kirchner, has been dissolved and replaced by Enacom, since her party was voted out of office in late October 2015.
It had ruled that the investment firm was “not in a position to operate and take control” of the incumbent as it had “demonstrated neither experience nor expertise”.
At the time, TIM said US-based Fintech planned to appeal the decision. Speaking at the company’s FY 2015 results earlier this month, TIM CEO Marco Patuano said he was confident the deal would close by year-end.
Since the elections, another blocked telecoms deal, Nextel Argentina’s sale to media conglomerate Clarín, was allowed to complete in late January.
TIM agreed in November 2013 to sell a 68% stake in Sofora to Fintech – translating into an indirect 22.7% stake in Telecom Argentina – for US$960m. It sold an initial 17% stake for US$114m in December 2013.
TIM’s current 51% stake in Sofora equates to 19.3% indirect ownership of Telecom Argentina. The remainder of Sofora is owned by Fintech (17%), and local investors Grupo Werthein (32%).
Sofora owns 100% of Nortel Inversora, the investment vehicle holding 54.74% of Telecom Argentina.
Under a revised agreement signed in October 2014, TIM gained the right to terminate the pact if the second part of the deal did not complete within the 30 months ending in April 2017.
In that event, it would receive a six-month call option to buy back the original 17% stake or sell the remaining 51% to a new buyer. Fintech also provided the Italian operator with a US$631m pledge of collateral, meaning that the seller would receive the full price.
Announcing its new three-year strategic plan last week, TIM CEO Marco Patuano said there would be further opportunity to reduce debt in 2016, through a possible continued exit from towerco Inwit, the sale of its stake in Telecom Argentinaand the €1.3bn mandatory convertible bond due November 2016. TIM is targeting a net debt/EBITDA ratio of below 3x by 2018.
The Italian incumbent ended 2015 with net debt of €27.3bn, a reduction of €0.9bn year-on-year.
Fintech was not immediately available for comment.
