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America Movil Agrees to Support KPN's Plans to Raise Funds from Shareholders
Published on:
Mexico's America Movil has announced that it is going to support the shareholder rights issue by Netherlands based KPN, but with conditions.
KPN is seeking to raise EUR3 billion from a rights issue and a further EUR1 billion through the issuance of "hybrid capital instruments". The struggling company is turning to shareholders to raise the EUR4 billion to help bring its EUR12 billion of debt down to a more manageable level.
America Movil built up a hostile 28% stake in KPN last year, and now that KPN is issuing new shares, had it not participated in the rights-issue, then its holding would have been reduced.
America Movil said in a stock market announcement that it is participating in the Rights Issue to strengthen KPN's capital base, maintain the basis for an investment grade rating and allow KPN to accelerate its focus on fiber deployment and network upgrades.
The decision was conditional though - and KPN has agreed that America Movil can appoint two directors to KPN's board from this April. The two companies will also work together on the preparation of annual business plans and budgets of KPN and subsidiaries.
In addition though, America Movil will not increase its holding in KPN above 30 percent - which would trigger a mandatory takeover bid under Dutch stock exchange rules anyway.
The pact between the two companies can be terminated with two months notice, although KPN has agreed to a two-year lock in on its side.
Tags: [america movil] [kpn] [Netherlands]
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