A joint venture led by Argentinian media conglomerate Grupo Veintitres is reportedly aiming to tie up the acquisition of NII Holdings subsidiary Nextel Argentina before the end of October, when Argentina plans to auction spectrum suitable for 4G…
A joint venture led by Argentinian media conglomerate Grupo Veintitres is reportedly aiming to tie up the acquisition of NII Holdings subsidiary Nextel Argentina before the end of October, when Argentina plans to auction spectrum suitable for 4G services.
However, the deal has been complicated after Argentina defaulted on its sovereign debt at the end of July and is now in legal wrangling with US bondholders.
In this context it will be difficult for the joint venture, Fucata, to raise the estimated US$1bn it needs to acquire spectrum and build infrastructure, a source told local newspaper Clarin.
Earlier this week, Fucata – which comprises Sergio Szpolski and Matias Garfunkel-owned Veintitres, US-based asset manager Optimum Advisors and London-based ISM Capital – acquired Nextel Chile from indebted NII for a reported US$35m.
It has now turned its attention to Nextel Argentina, which is set to cost between US$200m and US$225m, according to several local media reports.
Argentina’s bumper spectrum auction, its first since 1999, is scheduled for 31 October. Telecoms regulator Secom plans to sell licences in the 700 MHz, AWS, 850 MHz and PCS bands. The tender will be crucial for Nextel Argentina, which currently operates an outdated iDEN network.
NII is also under time pressure to complete a deal. In its Q2 results last week, the US-based telco said it will likely be forced to file for Chapter 11 bankruptcy protection because of poor financial performance and an inability to meet certain debt obligations.
Earlier this year, the Latin America-focused group mandated UBS to examine its strategic alternatives, including a potential sale, and Rothschild to improve its capital structure.
The company – which also has units in Brazil and Mexico – said it lost 77,000 subscribers in the quarter, bringing its total customer base to 9.4 million subscribers. Operating revenues were down 23% on the Q2 2013 result to US$969m. Net debt stood at US$4.8bn, while consolidated cash totalled US$1bn.
