NEW YORK-Compania de Telecomunicaciones de Chile S.A., a multiservice telecommunications company, announced it will purchase from VTR S.A. the 45-percent stake it doesn’t already own in Startel S.A., the leading mobile telecommunications carrier in Chile.
CTC, in which Spain’s national telephone company, Telefonica de Espana, indirectly owns a 43.6-percent stake, also said it plans to seek permission from Chile’s Antitrust Commission to acquire a 94-percent ownership position in VTR Larga Distancia S.A.
According to Moody’s Investors Service, CTC plans to finance these transactions initially by issuing $475 million of debt, but it also will consider issuing $200 million in stock within the next six months to strengthen its balance sheet.
Moody’s confirmed Dec. 22 its speculative grade Baa1 ratings on CTC’s about $270 million of outstanding debt.
Chile’s telecommunications market is among the most deregulated in the world. However, the country has a population of just 14 million and is therefore unlikely to “attract or support a significant amount of competition,” Moody’s said.
“The (rating) confirmation is based on Moody’s belief that CTC will sustain its dominant position in the growing Chilean wireline and wireless telecommunications markets … and will maintain adequate financial flexibility through prudent balance sheet management.”
