Maxcom Telecomunicaciones announces that Transtelco Acquisition III today initiated a mandatory acquisition tender offer

Rhea-AI Summary

Maxcom Telecomunicaciones announces a mandatory acquisition tender offer initiated by Transtelco Acquisition III to buy up to 276,471,081 shares at $2.20 per share. The offer period is expected to last 20 business days, concluding on October 21, 2021. Additionally, Transtelco has launched a Notes Tender Offer for the 8% Senior Secured Notes due 2024, which is also linked to the success of the equity offer. If both offers succeed, it could enhance Maxcom's financial viability; otherwise, the company may consider reorganization options.

Positive

• Potential improvement in financial viability and continuity of operations if both offers succeed.
• Strategic move could consolidate Maxcom's market position in the medium to long term.

Negative

• Risk of reorganization if both the Equity Tender Offer and Notes Tender Offer fail.
• Estimated payment of approximately USD$7.6 million to Junior PIK Notes holders upon successful Equity Tender Offer, which could strain finances.

MEXICO CITY, Sept. 24, 2021 /PRNewswire/ -- Maxcom Telecomunicaciones S.A.B. de C.V. (BMV: MAXCOM A, OTC: MXMTY) ("Maxcom" or the "Company") announces that Transtelco Acquisition III, S. de R.L. de C.V. (the "Offeror"), today initiated, in accordance with the Mexican Stock Exchange Act (Ley del Mercado de Valores or "LMV") and the General Regulations for Issuers and Other Participants of the Stock Exchange (Disposiciones de Carácter General Aplicables a Emisoras y a Otros Participantes del Mercado de Valores (the "Regulations") a mandatory acquisition tender offer (the "Equity Tender Offer") to acquire through Bolsa Mexicana de Valores, S.A.B. de C.V., S.A.B. de C.V., S.A.B. de C.V., up to all of the shares representing the capital stock of the Company, which represent 276'471,081 ordinary, nominative, without par value, subscribed and fully paid series "A" shares, at a purchase price of $2.20 (two Pesos 20/100, Mexican pesos), per share. 

The period of the Equity Tender Offer, under the LMV and the Regulations and, in terms of the corresponding Offering Memorandum, will be 20 business days, which may be extended by the Offeror at its sole discretion, complying with the requirements of the Law. The Equity Tender Offer period is expected to conclude, if not extended, on October 21, 2021.

Yesterday, Transtelco Holding, Inc. ("Transtelco") launched a cash tender offer (the "Notes Tender Offer") to buy the outstanding principal amount of the 8% Senior Secured Notes due 2024 (the "Notes") issued by Maxcom, as well as a solicitation of consents to amend the indenture governing the Notes (the "Consent Solicitation"), the foregoing pursuant to the terms and subject to the conditions set forth in the Notes Tender Offer and Consent Solicitation Statement made by Transtelco, as of September 23, 2021.

The Notes Tender Offer and Consent Solicitation will remain in effect until October 21, 2021 unless extended at the request of Transtelco.

Furthermore, the successful conclusion of the Equity Tender Offer is conditioned upon the successful completion of the Notes Tender Offer and vice versa, among other conditions.

In the case of the successful closing of the Equity Tender Offer, this would result in a change in control of the Company, consequently triggering the mandatory redemption of the Junior Pay-in-Kind Notes (the "Junior PIK Notes"), we estimate that the amount payable to Junior PIK Notes holders would be approximately USD$7.6 million, assuming the implicit Equity Value generated in the acquisition of the Company.

If both processes are successfully concluded, Maxcom expects that the outcome would be key to improving its financial viability as well as the continuity of its operations, and would constitute a decisive step in consolidating its value proposition in the medium and long term.

Contrarily, in case of an unsuccessful conclusion of both processes, Maxcom would continue analyzing different alternatives, including a potential reorganization procedure, in order to safeguard the continuity of its operations, prioritizing always the fulfillment of the legal and fiscal regulatory framework, as well as the interests of our collaborators and clients.

For more information on the Equity Tender Offer, the Notes Tender Offer, and the Consent Solicitation, please visit the Company's website: http://ri.maxcom.com/.

Maxcom appreciates the permanent support from all its stakeholders and confirms its commitment to maintaining close communication with the investing public.

About Transtelco

Headquartered in El Paso, Texas, Transtelco is a leading global digital infrastructure solutions provider, which includes a state-of-the-art long-haul and metropolitan fiber network in the Southwestern U.S., Mexico and Latin America. It offers Dedicated Internet Access, Long-Haul & Metro Transport, Colocation and Telephony services to global telecom carriers and blue-chip enterprise customers. Transtelco's differentiated bi-national and bi-cultural approach allows it to consistently deliver superior results to customers and exceed expectations. Transtelco delivers services over its own infrastructure that spans over 15,000 miles from Los Angeles to Dallas and Tijuana to Mexico City through a unique network that provides route diversity, redundancy and protection. For more information, visit transtelco.net.

About MAXCOM

Maxcom launched its commercial operations in May 1999, holding its headquarters in Mexico City. Maxcom is a facilities-based telecommunications provider that uses a "smart-build" approach to deliver last-mile connectivity, metropolitan and long-distance transportation services, colocations and other value-added services, both to the enterprise segment and to the national and international carrier segment. Maxcom provides its services through a fiber optic network of more than 8,500 kilometers, which allows it to have points of presence in the main cities of Mexico.

The information in this press release is the exclusive responsibility of Maxcom Telecomunicaciones, SAB de CV, and has not been reviewed by the Mexican National Banking and Securities Commission (CNBV) or any other authority.

The trading of these securities by an investor will be made under such investor's responsibility.

For more information contact: 
Rodrigo Wright 
México, D.F., México 
(52 55) 4770-1170 
rodrigo.wright@maxcom.com

 

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SOURCE Maxcom Telecomunicaciones, S.A.B. de C.V.

FAQ

What is the purpose of Maxcom's Equity Tender Offer?

The Equity Tender Offer aims to allow Transtelco Acquisition III to acquire up to 276,471,081 shares of Maxcom at $2.20 per share, which could enhance Maxcom's financial situation.

When does the Equity Tender Offer period end?

The Equity Tender Offer period is expected to conclude on October 21, 2021, unless extended by the Offeror.

What is linked to the successful conclusion of the Equity Tender Offer?

The successful conclusion of the Equity Tender Offer is contingent upon the completion of the Notes Tender Offer.

What happens if the offers are not successful?

If both offers are unsuccessful, Maxcom may explore reorganization alternatives to ensure operational continuity.