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Mexico to bail out telecoms company Altan Redes

reuters.com · 06/10/2022 11:44
Mexico to bail out telecoms company Altan Redes

- Mexico will bail out a flailing telecommunications company tasked with developing a wholesale national mobile network in the country, President Andres Manuel Lopez Obrador said on Friday.

Mexico signed an agreement to become the majority stakeholder in Altan Redes, which filed for bankruptcy in 2021, Lopez Obrador said in a regular news conference.

"The Mexican state is already the majority partner, it has the direction and the administration of the company," Lopez Obrador said, adding that the move will secure Internet access in all towns and free Wifi in public squares, schools and hospitals.

Altan Redes has since 2016 been developing the so-called Red Compartida (shared network), which is part of sector reforms aimed at curbing the dominance of the giant America Movil AMOV controlled by the family of billionaire Carlos Slim, and improving the low levels of mobile phone penetration and network coverage. nL1N2OQ05C

In March, Mexico's telecoms regulator, the IFT, granted the company an extension of the target of 92.2% coverage compliance until January 24, 2028 instead of 2024.

The company is expected to raise $250 million from lenders to allow the Mexican state to take over the scheme, Project Finance International reported Thursday. State-owned Banco Nacional de Comercio Exterior (Bancomext), Nafin, and Banobras are providing a combined $150 million in financing. The other $100 million is coming from a deal through telecom equipment providers Nokia NOK and Huawei, and China Bank Corporation. nIfpFWy5J

The debt will be converted to new shares in the public-private partnership (PPP) that will be owned by the Mexican state.

(Reporting by Cassandra Garrison; Editing by Kirsten Donovan)

((Cassandra.Garrison@thomsonreuters.com; +52 55 6200 7873;))