America Movil SAB, Latin America’s biggest mobile-phone company by market value, fell the most in two months on concern it faces growing losses on an investment in Dutch phone company Royal KPN NV.
America Movil, controlled by billionaire Carlos Slim, fell 2 percent to 15.87 pesos at the close of Mexico City trading, the biggest decline since Dec. 5. KPN, based in The Hague, tumbled 16 percent today in Amsterdam, the most in 11 years.
KPN said today it plans to sell 4 billion euros ($5.4 billion) in shares to reduce debt and increase “strategic flexibility.” Mexico City-based America Movil, which bought a 28 percent stake in KPN in June, may face dilution unless it adds to the investment, said Alejandro Gallostra, an analyst at BBVA Bancomer SA.
“Investors don’t like the company spending excess cash outside of Latin America,” Gallostra said in a phone interview from Mexico City. “It’s definitely having an impact on the company because this is the first investment outside Latin America for America Movil.”
As of today’s close in Amsterdam, America Movil’s 28 percent stake in KPN was worth about 1.38 billion euros ($1.9 billion), a drop of about 55 percent from the 3.07 billion euros Slim’s carrier spent acquiring the Dutch company’s shares.
An America Movil official who asked not to be named under company policy declined to comment on whether the company would seek to participate in KPN’s capital plan.
Slim’s position on the share sale is unclear, KPN Chief Executive Officer Eelco Blok said today.
A decision not to invest $1.4 billion in the rights offering to maintain the stake might signal that the company’s “foray into Europe was a mistake,” Walt Piecyk, an analyst at BTIG LLC in New York, said in an e-mail. “If they do invest in KPN, it could indicate that America Movil does have some larger strategic designs on Europe.”