Colombia gives Tigo-UNE deadline to solve financial woes

Colombian telecom and competition authorities have given operator Tigo-UNE until October 9 to sort out its finances or face a corporate reorganization process.

Details have been agreed by representatives of Tigo's controller Millicom, its local partner Empresas Públicas de Medellín (EPM) and Tigo in a meeting on Monday, the ICT ministry (Mintic) reported. 

Officials of the country’s industry and trade watchdog also took part.

Mintic said the telco's shareholders must make a decision before the deadline expires, or the ministry will start a business reorganization process in line with the law.

"The government's will is to maintain the company's operation, and thus preserve the connectivity of 12.5mn users and the employment of the 15,000 professionals, who work directly and indirectly. Whatever decision is made, what we seek is that in no case should the service be stopped, and that we advance the connectivity plan in the country at all times," ICT minister Mauricio Lizcano was quoted as saying.

Tigo-UNE's losses amounted to 474bn pesos (US$106mn) during 2022. Tigo-UNE's major shareholders are EPM (50%) and Millicom (49.99%).

According to the report, different strategies were reviewed to safeguard the company's operation, maintain market stability, user services and job stability.

The company must be capitalized or have its capital diluted. “If a decision is not made before this date, a business reorganization process will be entered into, to guarantee the provision of the service,” the ministry said.

If the company is capitalized, an investment of US$150mn would be made, split half between UNE and Millicom. If it is diluted, Millicom would provide all resources and EPM lose a chunk of its share.

The ministry’s move comes shortly after Tigo, Claro, Movistar and WOM pledged a joint investment of 3.5tn pesos to connect 12mn Colombians.