Medellin Mayor Proposes Sale of EPM’s 49.99% Share of Tigo-UNE
Medellin Mayor Federico Gutiérrez announced July 4 that he will bring a proposal to the Medellin City Council this month to sell city-owned EPM’s 49.99% share of telecom-internet-cable-TV giant Tigo-Une.
The move comes on the heels of Atlas Luxco’s US$4.1 billion proposal to buy-out Luxembourg-based Millicom. Millicom owns the other half of Tigo-UNE here in Medellin, as well as various telecom-internet companies in parts of Latin America and Africa.
France-based billionaire investor Xavier Niel is the principal owner of Atlas Luxco.
“I want to inform the citizens of Medellín that in the coming days I will present a draft agreement to the Medellin Council so that authorization to sell the participation that EPM has in Tigo-Une can be discussed,” Mayor Gutiérrez announced.
“It will be a transparent citizen discussion based on trust. I guarantee that the resources obtained in this sale will be used to improve the quality of life of our citizens. Our goal is always to take care of EPM and protect public assets.”
Tigo-UNE has been a financial drain on city-owned EPM for years, facing difficult competition from Movistar (owned by Spain-based telecom giant Telefonica) and Mexico-based Claro.
According to Atlas Lux, “the offer values Millicom — based on all outstanding 171,255,66410 shares — at approximately US$4.1 billion.”
“Specifically, Atlas wants to continue expanding the reach and capacity of Millicom’s networks and distribution capabilities to grow its customer base and better leverage its comprehensive telecom expertise.
“Atlas believes that the company will benefit from the purchaser’s long-term knowledge and experience in the telecom sector across numerous jurisdictions, as well as the creation of potential synergies that will allow Millicom to be better equipped to focus on long-term business goals, including pursuing any potential strategic transactions and acquisitions.”
Here in Medellin, Tigo-UNE has been a money-loser for years, posting a US$24.8 million net loss in first quarter 2024 as well as a US$295 million net loss for full-year 2023 and a US$122 million net loss for full-year 2022.
The company announced last October that it had achieved a US$69.4 million recapitalization deal to avoid bankruptcy (see Medellin Herald October 5, 2023). But that hasn’t stopped the financial bleeding.
Hence Mayor Gutiérrez’s latest proposal to sell EPM’s stake in Tigo-UNE seems especially logical now given Atlas Luxco’s concurrent proposal to buy-out Tigo-UNE partner Millicom.
