Millicom becomes largest foreign investor in Guatemala

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Millicom, the Luxembourg headquartered firm that sells cellular and broadband providers in Latin America and Africa, stated on November 11 that it'll purchase out its venture associate in Guatemala and take full control of its operations.

The $2.2 billion deal is the largest-ever single overseas funding in the Central American nation. Previously, Millicom owned 55 per cent of its Guatemala operation. The deal sees Millicom take sole control of the venture after buying out its associate, Panama-based Miffin Associates, which is managed by Guatemalan billionaire Mario Lopez Estrada. 

The deal is larger than the entire annual overseas direct funding in Guatemala for any yr since 1970. A gaggle of worldwide banks will present bridge financing for the deal, which would then be refinanced by debt and a new equity rights providing within the first quarter of 2022, Millicom stated.

The transfer is predicted to spice up free cash circulate to fairness by about $200 million this yr, giving it more exposure to a creating country that has a secure financial system and foreign money, stated Mauricio Ramos, Millicom’s chief government.

Millicom’s model in Guatemala, Tigo, is the most important cellular provider in the nation, forward of Mexican billionaire Carlos Slim’s America Movil.

“We see them on the road day by day, preventing for each single shopper on the market,” Ramos stated of his competitor. “We definitely hold our own and we'll continue to take action.” 

Guatemala’s gross domestic product is predicted to develop 5 per cent this yr. The country has a inhabitants of about 18 million and the most important financial system in Central America, based on the World Financial institution. The country, nevertheless, suffers from a low quality of life with greater than 45 per cent of its individuals dwelling in poverty. 

Earlier this yr, Millicom stated that it might sell its remaining African operations to shift to focus squarely on its 9 markets in Latin America, nevertheless, that sale continues to be subject to regulatory approvals. 

With the US encouraging improvement within the country – within the hope that it discourages illegal migrating north – the acquisition is being acquired as a robust vote of confidence within the financial system of Guatemala.

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