Business

America Movil to take controlling interest in Chile's ClaroVTR

America Movil to take controlling interest in Chile's ClaroVTR

America Movil (AMX), a provider of telecommunications services across Latin America, and Liberty Latin America (LLA) ], a communications company with operations in Puerto Rico, the Caribbean and other parts of Latin America, have announced that America Movil will be consolidating the Chilean joint venture ClaroVTR into its ongoing operations.

It was in October 2022 that VTR Communications and Claro Chile, the alliance between Mexico's America Movil and Liberty Latin America, was given the green light to launch a joint venture that was to offer fixed and mobile services such as internet, pay television, and text messages.

This latest deal is subject to obtaining the required approval from the National Economic Prosecutor’s Office of the Republic of Chile, though this development may not be a major surprise to many observers.

As the release announcing the deal points out: “As previously disclosed, AMX has been providing funding to ClaroVTR through convertible notes to support the execution of its business plan and for the refinancing of certain bank debt existing at the formation of the JV, and Liberty Latin America had the right to catch-up its respective portion of such funding commitments by the middle of this year for ClaroVTR to continue as a 50:50 joint venture.”

On 23 June, Liberty Latin America informed AMX it would not be exercising such a right. As a result, AMX will convert its outstanding notes held in ClaroVTR into equity, resulting (subject to adjustments at closing) in a controlling interest of approximately 91%.

LLA will continue to own approximately 9% of the equity of ClaroVTR. Closing of the conversion is expected during the third quarter of this year.

Where this leaves recent announcements about 5G provision in the country is unclear, though the official reaction has been predictably upbeat.

Both Daniel Hajj, CEO of America Movil (“We look forward to the prospects of this business”), and Balan Nair, CEO of Liberty Latin America (“America Movil is a great partner and ClaroVTR has a strong management team in place to lead the business… the long-term outlook is bright”), have been very positive in their formal responses to the news.



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