CARROLLTON, Texas-CellStar Corp. announced plans to sell part of its investment in Topp
Telecom Inc. to Telefonos de Mexico SA and other Topp shareholders for about $7 million. Separately, Topp and
TelMex announced Telmex agreed to purchase a majority interest in Topp.
CellStar said it will retain 19.5-percent
equity ownership in Topp and a note receivable from Topp for approximately $22.5 million, payable beginning
immediately and principal payments beginning in April 2000.
Under the TelMex-Topp agreement, TelMex is
making an equity investment in Topp to fund the company’s growth. Completion of the transaction is contingent on an
anti-trust review under the Hart-Scott-Rodino Act.
CellStar expects to report a gain of $7 million in the first quarter,
ending Feb. 28. In the last quarter, as a result of Topp’s continuing losses, CellStar reduced its investment in Topp to
zero.
