On November 13, 2013, Fintech Telecom entered into a series of agreements with Telecom Italia S.p.A. (“TI”), Telecom Italia International N.V. (“TII”) and Tierra Argentea S.A. (“TAR” and together with TI and TII, “Telecom Italia”) pursuant to which Fintech will acquire all of the direct and indirect interest of Telecom Italia in Telecom Argentina, S.A. (“TEO”) for an aggregate consideration of $960 million. As part of the acquisition, one of Fintech’s affiliates agreed to guarantee Fintech’s payment obligations under the agreements and to pledge American Depositary Shares of Nortel Inversora with a market value of approximately $100 million to secure such obligations.
The acquisition will occur in two stages. First, Fintech will acquire shares of TEO and American Depositary Shares of Nortel held by TAR before the end of the year. Second, Fintech will acquire shares of Sofora Telecomunicaciones S.A. representing 68.00% of its voting stock. Sofora owns 100% of the common stock of Nortel, which in turn owns 54.74% of TEO’s common shares. The acquisition of Sofora’s shares remains subject to governmental approvals in Argentina and in the United States, as well as certain conditions precedent.
Telecom Italia is Italy’s largest telecom operator and has been a participant in Telecom Argentina since its privatization in the 1990s. Telecom Argentina is one of the leading telecommunication companies in Argentina providing fixed and mobile telephony services and internet with more than 20 million customers and 15,000 employees. Common shares of Telecom Argentina and preferred shares of Nortel are listed on the New York Stock Exchange.