Grupo Iusacell Suspends Repayments of US Dollar Debt

Mexico's Grupo Iusacell has begun talks to renegotiate its foreign currency-denominated debt, and has suspended repayments of all US-Dollar debt pending the talks. The company says that it has been affected by the strong devaluation of the Mexican peso versus the U.S. dollar and the current world economic slowdown. The Peso has declined by over 20% against the US Dollar last year.

Grupo Iusacell said in a statement that it is confident in the support of its creditors to reach necessary agreements.

As a result of the current situation, one of the subsidiaries of Grupo Iusacell has temporarily suspended the service of its U.S. dollar-denominated obligations while the conversations take place. Nonetheless, the company has informed that it continues to serve its obligations in local currency.

The company has hired Hill Street Capital as its financial advisor.

Figures from the Mobile World analysts shows that the company ended last year with 3.5 million subscribers, and a market share of 4.5%. The market is dominated by America Movil, which has 56.4 million customers and 72% of the market.

Posted to the site on 1st April 2009