Tuesday, December 12, 2023

Millicom proposed, for the third time, a plan to use Tigo

On Thursday afternoon, Millicom presented a third capitalization proposal for Tigo, for the consideration of EPM, its business partner, so that the company can save itself from a reorganization in the business that comes in the middle of October, because he is absent. money to pay his debts.

The proposal includes the same amount of money that has been on the table since the beginning of the negotiations, which is 600,000 million pesos, which will be between the two and together; In other words, EPM must contribute 300,000 million pesos pro rata to its participation and Millicom will do the same.

And in addition, “in order to improve the liquidity of EPM regarding its investment in UNE, Millicom will extend in favor of EPM until December 31, 2026 the so-called ‘Public Asset Protection Clause’. This significantly improves the liquidity that EPM has in relation to its investment in UNE and to allow EPM more time so that, if it decides to do so, it can sell its participation in UNE, on better and more liquid conditions.

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In its first proposal, Millicom offered EPM an option so that, after one year, EPM could – if it wanted and at full option – cause Millicom to buy these new shares from EPM, of the subscription price, plus 10%.

Here, on the other hand, the expansion of the Public Asset Protection Clause creates a more significant window of opportunity for EPM. It should be noted that within the merger agreement that gave life to Tigo UNE, a clause was established that guaranteed EPM that if the merger shares were to be sold, Millicon would prefer to buy the shares at the market price. /or the one provided by EPM. Otherwise, the entire company must be sold.

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This clause expires on August 14, 2024, so the desire of the administration of Daniel Quintero to finish the sale of his term, because next year the procedures before the City Council will not be finished.

If this plan is accepted, EPM can exit Tigo by selling its stake until December 2026.

On October 11, the deadline established by the National Government for the capitalization of the company will expire; if this is not achieved, it will be sent to a business reorganization process before the Superintendency of Companies as its main creditor.

In this regard, Mayor Quintero assured that this proposal will be studied and appreciated that they included the option of extending the protection clause for public assets, which was rejected 5 times by the Council, as well as a “guarantee of EPM from Millicom so that the money is not lost,” he wrote on his X account (formerly Twitter).

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