The above, argued the company, because it is going through a complex economic moment that could affect its operational payment capacity, which in the long run could lead to liquidation.
In mid-April, the telecommunications company WOM Colombia requested the Superintendency of Companies to be admitted to a business reorganization process.
The above, argued the company, because it is going through a complex economic moment that could affect its operational payment capacity (payment to suppliers, employees and other acquired financial obligations), which in the long run could lead to liquidation.
To avoid this scenario, Colombian regulations have the figure of business reorganization available to companies, which consists of providing an opportunity for WOM, in this case, to sit down with its creditors to renegotiate debts, seeking payment agreements. that are more favorable to you and allow you to stay afloat.
This Friday the Superintendence of Companies reported that, after completing the review process, WOM officially entered into a business reorganization process.
“On the occasion of the beginning of the bankruptcy process, creditors must present their credits to the designated promoter and to the Superintendency, so that the Bankruptcy Judge in hearing approves the total of the liabilities that will be subject to restructuring, as well as the inventory of assets of the company,” he reported.
“It is important to remember that Partners Telecom Colombia SAS merged and absorbed Avantel SA, which also carried out a recovery process before the Superintendency of Companies that culminated with the execution of the Reorganization Agreement, which is still in force and will be complied with in a manner timely as indicated by the company,” he added.
It must be said that the difficulties caused by WOM are not exclusive to it, since the entire telecommunications sector has been facing challenging months due to various variables in the market, among these the decreases that have been registered in the ARPU (the average income per user), as well as the inflationary outlook, accompanied by high interest rates, which have reduced the spending capacity of households.
Added to this is an aggressive investment commitment in which, in its three years, it has allocated more than US$ 1,080 million, including (with a cut-off to 2022) US$ 880 million in infrastructure; as well as the most recent purchase of spectrum for the commercialization of 5G, for which it paid US$ 318,340 million, in addition to a series of obligations to do (deployment commitments acquired with the State) that would add another US$ 100,000 million.
With the intention of mitigating any risk of liquidation of the company, the Ministry of ICT also organized a meeting in which the representative of WOM in Colombia, Ramiro Lafarga, representatives of the Superintendency of Industry and Commerce, as well as the largest shareholder of WOM in Colombia, the Icelandic businessman Thor Bjorgolfsson.
According to what was stated by the Superintendent of Companies, Billy Escobar, all this is a sign of the commitment that WOM has with its users and creditors, since it is doing what is considered prudent and responsible in a scenario like this.
What's next for the company?
In an interview, the Superintendent of Companies explained that, generally, a company in Colombia can remain in the business reorganization process for six months. That is to say, this season for WOM will consist of renegotiating its debts and looking for mechanisms to achieve financial stability.
Among the business moves that are seen coming in the coming days would be an eventual injection of resources by the main investor or investors of WOM in the country. Some estimates suggest that the operator would need US$25 million.
Thor Bjorgolfsson would play a leading role here, who is also the president of the investment fund Novator Partners, on which not only WOM but other telecommunications companies in countries such as the Czech Republic, Finland, Poland and Bulgaria depend. In other words, behind this operator in Colombia there is an important financial muscle.
According to Escobar, it is a very good sign that Bjorgolfsson has come to Colombia to express his interest in the company staying afloat. And although at the moment the results of the review of WOM's financial statements are not known, based on what was discussed in the meeting with Minister Lizcano, Escobar estimates that this telecommunications operator needs an injection of more than US$ 25 million to solve the problems. obligations you have with your suppliers and move forward.
“WOM indicated that they hope to meet their obligations with the resources generated by their operation, as well as the investment they achieve with the support of Deutsche Bank,” explained the Supersociedades.
The more than 6.2 million users that WOM has in the country will not experience any changes, since precisely this reorganization process allows companies to maintain their operations.
What's more, many will see improvements in their services since it must be taken into account that WOM received 5G spectrum, whose commercial expansion continues to increase.
Although they are different scenarios, the country has the recent benchmark of Tigo, which at the end of last year also went through a complex financial moment from which it was able to emerge thanks to a capitalization of $600,000 million.
In short, for some market analysts it is relatively normal for WOM to go through this type of situation (especially due to the intense investments it has made in recent years). This is a sector that offers profits long after investments are made, and in such a competitive and dynamic market in Colombia, it is very likely that investors will decide to inject the resources that the company needs to continue operating in Colombia, with the 2,600 jobs it generates.
“It should be noted that the company is up to date with its labor obligations, and is not in a situation of default, since this is a preventive action that allows safeguarding the viability of the business,” highlighted Billy Escobar.
