TV Azteca plans spinoff of Unefon
Telco thought to be a drag on company resources
Management credibility and share value took a major hit in 1999 when the broadcaster announced its plan to pay $180 million for the 50% stake in the telco, owned by Azteca chairman-CEO Ricardo Salinas.
Investors were again dismayed in July 2001 when Azteca extended an $80 million credit line to Unefon.
Unefon has been seen as a drag on Azteca resources and its market valuation. "This (development) is healthy," one analyst told Daily Variety. "TV Azteca will now be focusing again on its core business, television."
Under the plan, Azteca shareholders will each receive 0.37 Unefon shares for every locally traded share of Azteca by year's end, Mexico's No. 2 TV broadcaster announced late Monday.
Holders of Azteca American depositary receipts will receive about 5.88 Unefon shares for each ADR.
However, the credit line will remain open, leaving some doubt over the future relationship of the two companies.
Deal is subject to the approval of Azteca shareholders, but Azteca Holding, controlled by topper Salinas, owns most of the voting shares.
The other half of Unefon remains in the hands of Mexican businessman Moises Saba and his family.
In midday trading Tuesday, Azteca ADRs were down about 3% to $6.82 on the New York Stock Exchange.
