Maxcom Considers Bankruptcy After Takeover Deal Collapse

Maxcom Telecomunicaciones SAB said it’s considering operational and financial alternatives, including a Chapter 11 bankruptcy filing, after a takeover deal with Ventura Capital Privado SA collapsed.

The Mexican phone company said in a statement today that only 61.93% of old notes were tendered in a bond exchange, not enough to complete a swap, which was a requirement for an equity offer from Ventura Capital.

“In light of this outcome, Maxcom is considering all of its alternatives including, but not limited to, commencement of a Chapter 11 case or other restructuring proceeding,” the company said in the statement. The Mexico City-based operator didn’t provide a timeframe for the options under study.

Maxcom was seeking to complete the 2.90-pesos-a-share takeover offer, which would include an investment of $45 million to use for network improvements, to better compete with America Movil SAB (AMXL), Mexico’s biggest phone company. Maxcom said this month it may have to file for bankruptcy and may miss a June 15 coupon payment if enough debtholders didn’t agree to the bond swap, which expired yesterday.

The company had asked to exchange notes due in 2014 for new ones due in 2020, and Ventura had set a requirement that 80 percent of bondholders accept the swap. Ventura had the right to reduce that threshold to 75.1 percent at its discretion. Maxcom’s cash had dwindled to 102.9 million pesos ($8.4 million) from 147 million pesos at the end of 2012, it said April 11.

Ventura, which announced its offer for Maxcom in December, is a Mexico City-based private-equity firm led by investors including Enrique Castillo and Javier Molinar Horcasitas, former executives of bank Ixe Grupo Financiero SAB. Ixe was sold in 2011 to Grupo Financiero Banorte SAB.

To contact the reporter on this story: Crayton Harrison in New York at tharrison5@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.