Tigo’s future would be assured after the EPM Board of Directors announced around midnight on Wednesday, October 4, a capitalization plan after reaching an agreement with Millicom.
Through a statement, the Antioquia company explained that it was agreed to bring a joint capitalization in equal parts of up to 300,000 million pesos to Tigo, which this month will have to face a series of financial obligations that had the company in trouble.
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EPM also explained that the capitalization will be carried out with the market value of the share. The return of the resources provided will come through a repurchase of shares or through a mandatory purchase of the securities by Millicom at a value that both parties have agreed upon.
Likewise, the clause for the protection of public assets will be extended until December 2026. For the payment method, it was agreed that EPM will provide a part this month so that Tigo meets its financial obligations and the other part in December.
For the agreement to materialize, all that remains is for the necessary authorizations to be issued to enable the debt operation that Tigo needs to strengthen its cash flow.
Likewise, EPM will have the option to choose within a maximum period of one year between the execution of the public assets protection clause and the mandatory purchase option by Millicom. “With this decision, the Board of Directors of EPM ratifies its commitment to the search for alternatives to ensure the viability of Tigo-UNE and the well-being of all its interest groups,” can be read in the statement released by EPM.
Tigo Une, for its part, indicated that capitalization was mandatory to meet its financial obligations and to participate in the auction of the 5G connection spectrum planned by the national government for December 20 of this year.
EPM and Millicom had until October 11 to reach an agreement regarding the future of Tigo. The Ministry of Information Technology and Communications had warned that if this were not the case, it would proceed with a business reorganization process through the Superintendency of Industry and Companies.
The matter seemed like it would not be resolved easily because EPM had announced that it was not willing to put any resources into the capitalization of Tigo. This is what the now former mayor of Medellín, Daniel Quintero, had said.
“After verifying the current conditions of Tigo and the administration carried out by Millicom since 2014, the EPM Board of Directors has decided not to deliver 300 billion public resources that were requested by them as capitalization,” the former mayor wrote in his X account, formerly Twitter, in September.
Quintero had even denounced an alleged legal maneuver by Millicom so that EPM would only keep a 2% stake in the telecommunications company. “They had it approved despite EPM’s negative vote and violating the shareholders’ agreement that says that EPM’s vote and passage through the Council are also needed,” he said at the time.
Millicom had responded in a statement in which it assured that “this capitalization does not represent any dilution for shareholders who contribute capital. The decision of each shareholder whether or not to capitalize the company corresponds individually to each shareholder. EPM “It has not been diluted and maintains the possibility of contributing its part of the capital and maintaining its shareholding.”
But now that Quintero left his position with only three months remaining until his term expired, the agreement between the parties flowed more easily than expected.