Maxcom Drops as Takeover Collapse Raises Bankruptcy Specter

Maxcom Telecomunicaciones SAB’s bonds and shares fell as the Mexican phone company said it may seek bankruptcy protection after the failure of a takeover deal with Ventura Capital Privado SA.

The shares sank 16 percent to 4 pesos at the close in Mexico City, the biggest one-day decline since October 2008. Maxcom’s dollar bonds due in 2014 fell 1.3 cents to 68 cents on the dollar, according to data compiled by Bloomberg. The yield rose 1.5 percentage points to 39.38 percent.

The carrier failed to convince enough debtholders to complete a swap of the bonds for notes due in 2020, it said in a statement today. Only 61.93 percent of old notes were tendered in the exchange, below the 80 percent Ventura Capital required to go ahead with its offer for Maxcom shares.

“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, 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 it couldn’t complete 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.

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