Tigo UNE to Receive $142 Million USD in Capitalization Following Joint Agreement by Millicom and EPM

Millicom and EPM have agreed to jointly capitalize UNE EPM Telecomunicaciones S.A. (Tigo-UNE) under a deal that will see both parties retain their current shareholding in the company, the two companies announced yesterday.

Photo: Jorge Andrés Carrillo, general manager of EPM, speaks to the press following the agreement. (Image credit: EPM)

According to the agreement, which resolves a contentious standoff in recent months, each company will contribute roughly $71 million USD — or 300 billion Colombian pesos — for a total of $142 million USD that they say will be used to “prioritize the construction of digital highways in Colombia, expand the connectivity service to millions of users, and continue providing sources of employment (direct and indirect) for thousands of Colombians.”

This deal includes several changes to the 2013 shareholders’ agreement, including:

• Tigo-UNE may repurchase the shares of EPM and Millicom that are part of this capitalization, provided that the company’s financial conditions allow it.
• EPM will have a put option that, if exercised, would force Millicom to buy all the shares that EPM has in Tigo-UNE, which would allow EPM to recover the resources invested in this capitalization.
• EPM’s “Public Heritage Protection Clause” will run until December 31, 2026.

“This joint decision bets on the materialization of the business plan developed by Tigo-UNE, significantly improves its financial strength and allows it to continue providing the excellent telephony, internet and mobility service to its users, which characterizes the company,” said the companies in their statement.