UPDATE 1-Mexico to bail out telecoms company Altan Redes

(Adds statement from company with financial details)

MEXICO CITY, June 10 (Reuters) – Mexico will bail out a flailing telecommunications company tasked with developing a wholesale national mobile network, President Andres Manuel Lopez Obrador said on Friday.

Mexico signed an agreement to become the majority stakeholder in Altan Redes, which filed for bankruptcy in 2021, Lopez Obrador said in a regular news conference.

“The Mexican state is already the majority partner, it has the direction and the administration of the company,” Lopez Obrador said, adding that the move will secure Internet access in all towns and free Wifi in public squares, schools and hospitals.

Altan Redes said later, in a statement, that it reached an agreement for credit of $388.1 million.

Altan Redes has since 2016 been developing the so-called Red Compartida (shared network), which is part of sector reforms aimed at curbing the dominance of the giant America Movil controlled by the family of billionaire Carlos Slim, and improving the low levels of mobile phone penetration and network coverage.

In March, Mexico’s telecoms regulator, the IFT, granted the company an extension of the target of 92.2% coverage compliance until January 24, 2028 instead of 2024.

The company said the financing structure includes $161 million from the Mexican development bank, with another $166.6 million through supplier participation. Shareholders will contribute $50.5 million and the remaining $10 million is from clients.

The debt will be converted to new shares in the public-private partnership (PPP) that will be owned by the Mexican state. (Reporting by Cassandra Garrison; Editing by Kirsten Donovan and David Gregorio)