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 Business News | June 2005 
TV Azteca Pulls Out of NYSE
 Anthony Harrup - Dow Jones Newswire
| | Salinas' firms delist shares; and a spokesman says the decision has nothing to do with an ongoing SEC investigation. |
Shareholders of Mexican broadcaster TV Azteca SA and other companies controlled by businessman Ricardo Salinas Pliego voted Wednesday in favor of proposals to delist their shares from the New York Stock Exchange, a company official said.
TV Azteca, retail and consumer banking concern Grupo Elektra SA, and wireless phone company Grupo Iusacell SA, will delist their American Depositary Receipts.
Luis Nino de Rivera, vice chairman of Elektra unit Banco Azteca and spokesman for the Salinas Group, said TV Azteca shareholders voted almost unanimously in favor of delisting, while 91.5 percent of Elektra shareholders and 96.9 percent of Iusacell holders backed the proposals.
He rejected the assertion that the delistings had to do with the fraud charges brought by the U.S. Securities and Exchange Commission against Salinas and other TV Azteca officials over a 2003 debt transaction involving wireless phone company Unefon SA.
One of the measures the SEC is seeking is to bar Salinas from heading or serving on the board of any company that trades publicly in the United States.
In announcing the plans to delist last month, the three companies cited "excessive regulation" in the United States, which they said increases costs and expenses and legal risks with questionable benefits.
"It has nothing to do with the SEC investigation and the legal battle," Nino de Rivera said.
He said the decision to delist from the United States was a long time in planning, since the companies needed to make sure they could "stand on their own financially in a market different from the United States."
Elektra last year paid off the last of its dollar debt and plans to borrow exclusively in the Mexican market where corporate debt issuance has ballooned in recent years as a result of interest rate stability.
Nino de Rivera said Azteca Holdings is planning to replace the last of its dollar debt with peso debt soon, and the broadcaster will also rely exclusively on the domestic market for financing.
"These are peso generating companies, so it makes little sense to stay in dollar debt, when you have enough pesos in the market," he said.
For Iusacell, Mexico's No. 3 mobile phone service provider, the case is different since Salinas acquired the company for US7.4 million plus the assumption of US800 million in debt, which the company is trying to re-negotiate.
TV Azteca CPO shares rose 2.5 percent Wednesday to 5.70 pesos, while Elektra CPO shares added 0.8 percent to 77.60 pesos. TV Azteca ADRs rose 2.1 percent to US8.38, and Elektra ADRs added 1.4 percent to US28.60.
Nino de Rivera said the overwhelming votes in favor of the U.S. delisting lead the companies to expect that most shareholders will swap their ADRs for CPO shares that trade on the Mexican Stock Exchange. |
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