Fitch could lower ColTel

Fitch Ratings said it placed Colombia Telecomunicaciones SA ESP’s (ColTel) BB- long-term foreign- and local-currency issuer default ratings and senior unsecured notes and B subordinated perpetual notes on rating watch negative.

Fitch said the negative watch reflects increased pressure on ColTel's already weak liquidity position due to the negative arbitration ruling in force since Aug. 8, related to the concession assets from 1994, which requires the company to pay a 1.6 trillion Colombian peso arbitration verdict (equivalent to 160% of the capex projected by the company in 2017).

“The company is negotiating payment terms with the Ministry of Telecommunications (MinTic) to minimize the negative cash flow impact. A short deferral period without any material payment-in-kind arrangements will be negative for the ratings,” Fitch said in a news release.

“Also, any material delay in the recapitalization plan due to the arbitration ruling will be critically negative for the ratings.

“The rating watch will be resolved based on the final terms of the arbitration payment agreement and the progress on recapitalization.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.