July 24 (Bloomberg) -- Maxcom Telecomunicaciones SAB, a Mexico City-based phone company, sought bankruptcy protection with a plan backed by Ventura Capital Privado SA in hopes of emerging in less than two months.
Maxcom listed $11.1 billion in assets and $402.3 million in debt yesterday in U.S. Bankruptcy Court in Wilmington, Delaware. The company had assets valued at 4.98 billion pesos ($394 million) in the quarter ended March 31, according to an April 26 regulatory filing. Laura Davis Jones, a lawyer for Maxcom, wasn’t immediately available to comment on the discrepancy in asset figures.
“Maxcom will complete a comprehensive recapitalization and debt restructuring that is expected to significantly reduce Maxcom’s debt service expense and position Maxcom for growth,” the company said in a statement today. Fourteen affiliates also filed for court protection.
The company reached a restructuring agreement with Ventura Capital, a group holding about $86 million, or 48.7 percent, of the senior notes and about 44 percent of its equity holders, court papers show. Maxcom was unable to get the required support from noteholders to restructure out of court.
Maxcom requested a Sept. 10 hearing to seek court approval for its plan to exit bankruptcy, according to court documents. The plan was supported by more than 98 percent of the holders of the company’s $200 million in 11 percent senior secured bonds who voted on it before yesterday’s filing.
Under the proposal, all creditors except the senior noteholders will be paid in full, according to court documents. Ventura Capital agreed to make a $45 million capital infusion and offer to buy outstanding shares for 2.90 pesos each.
Senior noteholders would get $200 million in new notes with reduced interest and extended maturities, according to the statement. They will also have the right to buy equity that isn’t subscribed in the offering, worth as much as 15 percent of the value of their notes.
Maxcom has struggled to compete with billionaire Carlos Slim’s America Movil SAB unit Telefonos de Mexico SAB, or Telmex, the largest telecom provider in Mexico with 73 percent of the telephone-services market and 72 percent of the broadband Internet market, court papers show.
Maxcom said liquidity constraints prevented the company from spending capital upgrading and expanding its network to keep pace with advances in technology. Maxcom said it was also hurt by a transition to mobile phones from landlines.
Maxcom, with more than 2,000 employees, targets residential and small and medium-sized business customers mainly in Mexico City, Puebla, Queretaro, San Luis Potosi and Tehuacan. The company offers voice, data and Internet services and provides mobile voice service through resale and leasing agreements with third parties.
The case is In re Maxcom Telecomunicaciones SAB, 13-bk-11839, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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