Mexican broadcaster TV Azteca resolves loan dispute with American Tower
By Julia Love
MEXICO CITY, Oct 23 (Reuters) - Mexican broadcaster TV Azteca said on Tuesday it had paid American Tower Corp what it owed for a roughly $92 million loan plus interest, resolving a dispute that had clouded the company's credit profile.
As part of the agreement, TV Azteca paid the Boston-based cell tower owner and operator $53 million in cash, plus interest, the broadcaster disclosed in its third-quarter earnings report. The rest of the balance was covered by American Tower's use of TV Azteca towers in Mexico.
The broadcaster said it funded the payment to American Tower with a "peso-denominated bank loan," without specifying the source.
A spokesman for American Tower did not respond to a request for comment. A spokesman for TV Azteca declined to comment beyond the company's earnings release.
In May, an American Tower unit sued TV Azteca for nearly $97 million in a New York state court, saying the company had defaulted on the loan.
The broadcaster did not confirm or deny having defaulted on the loan in court papers.
TV Azteca has waged an aggressive campaign to reduce its debt in recent years, and the dispute took some investors by surprise.
After Reuters reported on the legal dispute in August, credit ratings agency Fitch placed TV Azteca on "negative watch," warning that a default on the loan from American Tower could lead to default on other loans under "cross-default" clauses.
Nevertheless, TV Azteca kept trimming its debt in the third quarter. The company's outstanding debt stood at 13 billion pesos ($694.5 million) at the end of the third quarter, down 19 percent from the same period last year, according to the earnings release.
The agreement with American Tower "reduces interest expenses and TV Azteca's exposure to liabilities in foreign currency," TV Azteca Chief Financial Officer Esteban Galindez said in a statement accompanying the company's earnings.
The company reported an 8 percent increase in net revenue for the third quarter and net income of 438 million pesos, up from a net loss last year. (Reporting by Julia Love; Editing by Peter Cooney)
