Mexico's Maxcom amends terms of exchange offer for 11% notes due 2014

By Jennifer Chiou

New York, March 7 - Maxcom Telecomunicaciones, SAB de CV said it updated the terms of the exchange offer for its outstanding 11% senior notes due 2014.

The company will issue new step-up senior notes due 2020 in exchange for the 11% notes.

Maxcom is amending the offer to add an obligation that it make an offer to repurchase the new notes at 85% of the principal amount with a portion of the capital contribution it receives from shareholders exercising their preemptive rights. The roughly $45 million capital contribution is to be made by the purchaser of the company in connection with the equity tender offer for Maxcom's series A common stock and related CPOs and ADSs.

The company previously amended the exchange offer to clarify that it is conditioned on the capital contribution.

Maxcom already pushed back the early deadline after having received no tendered notes as of 5 p.m. ET on Feb. 28. The early tender deadline is now 5 p.m. ET on March 13, and the offer will expire at 5 p.m. ET on March 27.

The early participation date was originally set at 5 p.m. ET on March 5 and the offer expiration at 5 p.m. ET on March 20. The offer began on Feb. 20.

Holders also must tender a minimum principal amount of $2,000 notes in order to participate.

As noted before, the current principal amount of old notes outstanding is $200 million, and the maximum principal amount of the new notes that will be issued in the exchange offer is $200 million.

The company is also soliciting consents to some proposed amendments to the indenture governing the old notes that would eliminate substantially all of the covenants other than the covenant to pay principal and interest when due and eliminate most events of default.

The proposed amendments will also facilitate the structure that allows the new notes to be secured by the old notes that are tendered in the exchange offer, thereby indirectly benefiting from the collateral that secures the old notes.

By tendering old notes, holders will be consenting to the proposed amendments.

Holders who tender by the early participation date will receive $1,000 principal amount of new notes for each $1,000 principal amount of old notes.

Holders who tender after the early participation date but before the offer expiration will receive $930 principal amount of new notes for each $1,000 principal amount of old notes.

The company previously said it would only accept old notes for exchange if at least 90%, including any old notes owned by the company, of the old notes are tendered, and the proposed amendments will only be effective if at least a majority, not including any old notes owned by the company, of the old notes are tendered.

Between Jan. 1, 2012 and May 31, 2012, the company acquired $22.9 million principal amount of the old notes, which are held in the company's treasury. The company said that if it receives tenders from eligible holders of at least 90% of the old notes, it will cancel the $22.9 million of old notes it holds.

The information agent is D.F. King & Co., Inc. (800 967-4607).

Maxcom, based in Mexico City, is a telecommunications provider of last-mile connectivity to micro, small and medium-sized businesses and residential customers.

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