Axtel Announces the Approval of the Merger of Alestra and Axtel

  • On Friday, AXTEL shareholders voted in favor of the merger and approved a $750 million Credit Agreement to refinance all of AXTEL’s Senior Notes;
  • Mexico’s CNBV also granted authorization to the transaction last week;
  • All conditions precedent for the merger have been satisfied; the effective date is February 15, 2016.

SAN PEDRO GARZA GARCÍA, Mexico--()--Axtel, S.A.B. de C.V. (BMV:AXTELCPO; OTC:AXTLY) (“AXTEL” or the “Company”), a Mexican telecommunications company, announced that last Friday, holders of 97% of its shares approved the merger (the “Merger Transaction”) of AXTEL and Onexa, S.A. de C.V. (”ONEXA”), parent company of Alestra, S. de R.L. de C.V. (“ALESTRA”). Additionally, on January 11, 2016, Mexico’s Comisión Nacional Bancaria y de Valores (“CNBV”) issued the exception necessary to proceed with the Merger Transaction without a tender offer.

On Friday, AXTEL also signed a credit agreement in the amount of $750 million (the “Credit Agreement”), which will be used to redeem all its outstanding 7.625% Senior Notes due 2017 (the “2017 Notes”), its 9.00% Senior Notes due 2019 (the “2019 Notes”) and its Senior Secured Notes due 2020 (the “2020 Notes”). The redemption date for the 2017 Notes, the 2019 Notes and the 2020 Notes will be February 19, 2016.

With the approval of AXTEL shareholders and the authorization from CNBV, as well as the closing of the Credit Agreement, all conditions precedent for the Merger Transaction have been satisfied. The Merger Transaction will become effective on February 15, 2016 (the “Effective Date”).

“This merger is a relevant strategic transaction that creates significant value to all AXTEL and ALESTRA's stakeholders”, said Tomas Milmo Santos, current Chairman and Chief Executive Officer of AXTEL, and future Co-Chairman of the Board of the combined company. “This value results from the benefits of combining two strong telecom networks and commercial platforms that, in addition to creating significant synergies, strengthens the competitive position of the combined entity.”

As disclosed in the Folleto Informativo, available to shareholders since December 15, 2015, AXTEL will issue new shares to Alfa S.A.B. de C.V. (“ALFA”), representing 51% of the post-Merger Transaction ownership (calculation excludes 43.4 million of Certificados de Participación Ordinaria in underlying financial instruments owned by AXTEL). On the Effective Date, AXTEL will become an ALFA subsidiary. All details concerning the Merger Transaction approval are disclosed in the resolutions of AXTEL shareholders’ meeting. This document is available in AXTEL’s office located in Blvd. Díaz Ordaz Km. 3.33 L-1, Colonia Unidad San Pedro, 66215 San Pedro Garza García, NL, Mexico, on its webpage at www.axtel.mx and the webpages of Mexico’s Bolsa Mexicana de Valores (”BMV”) and CNBV at www.bmv.com.mx and www.cnbv.gob.mx, respectively.

About AXTEL

AXTEL is a Mexican telecommunications company with significant growth in the broadband segment, and one of the leading companies in information and communication technologies solutions in the corporate, financial and government sectors. The Company serves all market segments - corporate, financial, government, wholesale and residential with the most robust offering of integrated communications services in Mexico. Its world-class network consists of different access technologies like fiber optic, fixed wireless access, point to point and point to multipoint links, in order to offer solutions tailored to the needs of its customers.

AXTEL’s shares, represented by Ordinary Participation Certificates or CPOs, trade on the Mexican Stock Exchange under the symbol “AXTELCPO” since 2005.

Forward-Looking Statements

This release may contain certain forward-looking statements regarding the future events or the future financial performance of AXTEL. These statements would reflect management’s current views with respect to future events or financial performance, and are based on management's current assumptions and information currently available and are not guarantees of the Company’s future performance. The timing of certain events and actual results could differ materially from those projected or contemplated by the forward-looking statements due to a number of factors including, but not limited to those inherent to operating in a highly regulated industry, strong competition, commercial and financial execution, economic conditions, among others.

Contacts

Axtel, S.A.B. de C.V.
Investor Relations
Adrian de los Santos or Nancy Llovera, +52(81) 8114-1128
IR@axtel.com.mx

Contacts

Axtel, S.A.B. de C.V.
Investor Relations
Adrian de los Santos or Nancy Llovera, +52(81) 8114-1128
IR@axtel.com.mx