Maxcom to buy back some step-up notes with funds from capital raise

By Marisa Wong

Madison, Wis., Nov. 5 - Maxcom Telecomunicaciones, SAB de CV anticipates it will use $32,388,661 to make an offer to repurchase its step-up senior notes due 2020, according to an 8-K filing with the Securities and Exchange Commission.

As previously disclosed, Maxcom completed a plan of reorganization on Oct. 11. As part of the pre-packaged plan, Maxcom conducted a capital increase - selling 1.62 billion shares of its series A common stock for $119.71 million - and exchanged its $200 million of 11% senior notes due 2014 for $180.35 million of the step-up notes.

Under the terms of the step-up notes, Maxcom is to use 50% of the capital contributions in excess of the capital contribution made by plan equity sponsors Ventura Capital Privado, SA de CV, Trust Number 1387, Javier Molinar Horcasitas and Enrique Castillo Sanchez Mejorada to make an offer to repurchase the notes, but only to the extent that amount exceeds $5 million.

Of the $119.71 million raised from the stock sale, the plan sponsors contributed $49.94 million. Investors other than the plan sponsors purchased $69.78 million of the shares.

The notes will be repurchased in cash at 85% of par.

Maxcom, a Mexico City-based telecommunications provider of last-mile connectivity to micro-, small- and medium-sized businesses and residential customers, filed for bankruptcy on July 23. The Chapter 11 case number is 13-11839.

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