MEXICO CITY (Reuters) – Mexican conglomerate Alfa will not provide any financial guarantees to its telecommunications unit Axtel during the subsidiary’s spin-off process, Alfa’s top financial officer said on Thursday.
Axtel is expected to reach $35 million cash flow this year, sufficient to carry out its operations, Alfa Chief Financial Officer Eduardo Escalante said during a call with analysts to discuss second-quarter results.
Earlier this month, Alfa’s shareholders approved the spin-off of the conglomerate’s 53.9% stake in Axtel and announced the creation of a new company to transfer all of its shares.
The new firm will be listed on the Mexican stock exchange as Controladora Axtel and could start trading in December, according to Escalante.
Axtel shares fell 2% on Thursday, and have accumulated a nearly 62% loss this year.
Lower government sales and delays associated with the global semiconductor shortage were among the factors cited by Escalante to explain Axtel’s second-quarter net loss.
The telecommunications firm reported a 171 million peso net loss for the three-month period, while Alfa subsidiaries Sigma and Alpek both posted positive results.
(Reporting by Valentine Hilaire; Editing by David Alire Garcia and Leslie Adler)
