MEXICO CITY-Grupo Iusacell announced a restructuring and recapitalization plan aimed at increasing liquidity of its public shares, providing proceeds to pay for personal communications services licenses in northern Mexico and creating more flexibility to obtain debt financing for its capital expenditures program, said the Mexican telecommunications carrier.
Grupo Iusacell aims to simplify its share structure by creating a new holding company, of which Bell Atlantic Corp. will maintain control. The plan has been approved by principal shareholders and is scheduled to be initiated immediately, with full implementation expected by the end of the year, said the company.
Grupo Iusacell will implement a one-for-one stock exchange offer to consolidate its four existing voting and limited voting share classes into two voting share classes of the new holding company. Prior to the exchange offer, the company plans to borrow $71.5 million from Bell Atlantic under its $150 convertible debenture facility, which Bell Atlantic immediately will convert into equity.
Grupo Iusacell said it will extend the economic benefit of the convertible debenture to the public shareholders by an $8.5 million rights offering of shares in the new holding company at the same conversion price of 70 cents per share. The principal shareholders then will sell a portion of their shares in the holding company to the public to increase the public float.
The company expects to raise net proceeds of $80 million from the two transactions, resulting in a 10.5-percent increase in total shares outstanding. When the transactions are completed, Bell Atlantic and the Peralta Group each will own about 42 percent of the holding company, with Bell Atlantic still in management control. The public float will be the outstanding capital stock, rather than the 10 percent of outstanding capital stock divided between two classes as it is today, said Grupo Iusacell.
