WorldWide Tech & Science. Francisco De Jesús.
Colombia: Movistar and Colombia Telecomunicaciones in a merger agreement.
Telefonica Moviles Colombia (Movistar), Colombia Telecomunicaciones, and the Colombian government have reached a final agreement to restructure their fixed and mobile business in Colombia. Colombia Telecomunicaciones is 52 percent owned by Telefonica Group and 48 percent by the Colombian government.
The agreement includes, among other commitments, the assumption by the government of the 48 percent of the payment obligations not yet due of Colombia Telecomunicaciones to Parapat, the consortium which owns the telecommunications assets and manages the pension funds for the entities that comprise the National Telecommunications Operator.
The agreements reached also include an amendment to the operating contract for the extension in six years, to 2028, of the payment obligations not yet due of Colombia Telecomunicaciones to Parapat.
As a result of these agreements, the net financial debt which will be fully consolidated in the financial statements of the Telefonica Group, will fall by approximately EUR 1.300 billion. The merger agreement is subject to the approval of the general shareholders' meetings of Telefonica Moviles Colombia (Movistar) and Colombia Telecomunicaciones, scheduled to take place on 24 April 2012.
Following the merger between Colombia Telecomunicaciones and Telefonica Moviles Colombia, Telefonica will hold 70 percent of the share capital of the resulting company, while the government will control the remaining 30 percent.
The merger of both companies s expected to create the second largest integrated operator in Colombia.
