March 14, 2013
/PRNewswire/ -- (NYSE: MXT, BMV: MAXCOM.CPO) – Maxcom Telecomunicaciones, S.A.B. de C.V. ("Maxcom" or the "Company") announced today that the exchange agent in the exchange offer (the "Exchange Offer") for any and all of the Company's outstanding 11% Senior Notes due 2014 (the "Old Notes") for its new Step-Up Senior Notes due 2020 (the "New Notes") has advised the Company that as of
, New York City Time, on
March 13, 2013
, or 60.09%, of the Old Notes had been validly tendered and not withdrawn in the Exchange Offer.
The concurrent equity tender offer for Maxcom's Series A Common Stock and related CPOs and ADSs (the "Equity Tender Offer") by the purchaser and the other co-bidders named in the Equity Tender Offer documents, and the binding obligation of the purchaser in connection with the Equity Tender Offer to make a capital contribution to Maxcom, which will be in the amount of approximately
, are conditioned upon, among other things, an exchange of at least 90% of the Old Notes in the Exchange Offer. If this condition is not met, Maxcom will not receive the capital contribution proposed by the purchaser.
If the Exchange Offer is not consummated and as a result the Equity Tender Offer is not consummated and the capital contribution to Maxcom is not made by the purchaser, Maxcom believes there is a significant risk to its operational and financial viability due to, among other factors:
- the Company's low and deteriorating cash balances and liquidity ratios,
- the Company's ability to meet its debt service obligations under the Old Notes may be at risk,
- a statement by one of the rating agencies that if the Exchange Offer is not consummated, the Company's credit rating could potentially be downgraded by more than one notch, and
- the Company will not have the ability to make necessary investments in technology, infrastructure and maintenance of its network.
If the Company is unable to consummate the Exchange Offer and secure additional capital and liquidity offered by the purchaser in connection with the Equity Tender Offer, then the Company will have to evaluate other alternatives available to it under law to conserve its cash and restructure its debt obligations including, but not limited to, debt forgiveness, an extension of maturity, and a lower coupon.