Mexico's Maxcom tenders for up to $38.1 million of step-up notes

By Marisa Wong

Madison, Wis., Nov. 12 - Maxcom Telecomunicaciones, SAB de CV said it began a cash tender offer to purchase up to $38,104,308 principal amount of its outstanding step-up senior notes due 2020. There is currently $180,353,962 principal amount of the notes outstanding, according to a company press release.

The tender offer began on Nov. 8 and will expire at 11:59 p.m. ET on Dec. 11.

Holders who tender their notes will receive $850 per $1,000 principal amount of notes, along with accrued interest up to, but not including, the payment date.

Tenders may be withdrawn at any time at or prior to the expiration date.

D.F. King & Co., Inc. (banks and brokers call 212 269-5550, all others call 800 488-8035) is the tender agent and information agent.

The company previously announced that it anticipated using $32,388,661 of proceeds from a stock sale to make an offer to repurchase its step-up notes at 85% of par.

As disclosed earlier, 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.

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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