Millicom makes big bet on Guatemala in $2.2bn telecoms deal

Telecoms firm Millicom mentioned on Thursday it should purchase out its enterprise accomplice in Guatemala and take full management of its operations in a $2.2bn deal, the biggest ever single international funding within the Central American nation.

Millicom, which sells cellular and broadband providers in Latin America and Africa, beforehand owned 55 per cent of its Guatemala operation. The deal will see it take sole management, shopping for out its accomplice, Panama-based Miffin Associates, which is managed by Mario López Estrada, certainly one of Guatemala’s richest males.

The transaction will enhance free money move to fairness by about $200m in 2021, and provides it extra publicity to a rustic with a secure economic system and foreign money, mentioned Mauricio Ramos, Millicom chief govt.

“All of us hear so very a lot about politics and immigration and corruption however beneath that there’s a rising economic system, a really younger inhabitants and digital adoption charges which are like none you see wherever around the globe,” Ramos advised the Monetary Instances.

A gaggle of worldwide banks would offer bridge financing for the deal, which might then be refinanced by debt and a brand new fairness rights providing within the first quarter of 2022, the corporate mentioned.

The $2.2bn deal is bigger than whole annual international direct funding in Guatemala for any yr since at the least 1970, World Financial institution data show.

Millicom, which is headquartered in Luxembourg and publicly listed in New York and Stockholm, mentioned earlier this yr that it might sell its last Africa operation, because it shifts to focus squarely on its 9 markets in Latin America. That sale remains to be topic to regulatory approvals.

Tigo, Millicom’s model in Guatemala, is the biggest cellular supplier within the nation, forward of Mexican billionaire Carlos Slim’s América Móvil, with which it competes throughout the area.

“We see them on the road each day, combating for each single client on the market,” Ramos mentioned of his competitor. “We definitely maintain our personal and we are going to proceed to take action.”

The acquisition can be a vote of confidence within the economic system of Guatemala at a time when the US authorities is making an attempt to encourage growth to cease its residents migrating north.

Guatemala’s gross home product is anticipated to develop 5 per cent this yr. The nation has a inhabitants of about 18m and the biggest economic system in Central America, in response to the World Financial institution. Regardless of its relative financial stability, greater than 45 per cent of its individuals dwell in poverty.

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