Telefonica announced that it has come to an agreement with the Colombian government to increase the capital of its subsidiary Colombia Telecomunicaciones (Coltel) by around EUR 1.37 billion to pay debt owed to asset management fund Parapat. The government still owns 32.5 percent of the company following the merger of Colombia Telecomunicaciones (Coltel) and Movistar Colombia in 2012, with Telefonica owning the remaining 67.5 percent. The Spanish group said its capital injection into Coltel will amount to around EUR 925 million and will fully settle its obligations with Parapat, the consortium that owns the telecommunications assets and manages the pension funds of the former companies that resulted in Coltel.
Telefonica and the Colombian government also announced a further EUR 472 million capital increase in proportion to their respective stakes to comply with a Colombian arbitration fine for breaching a government contract for mobile services. Last month a Colombian arbitration panel said Coltel and America Movil unit Comcel had failed to return installed telecommunication networks and infrastructure as part of agreements to provide mobile services dating back to 1994.
However, like Comcel, Telefonica said it strongly disagreed with the ruling and reserved its right to take any applicable national and international legal action to challenge the award.The two capital increases amount to a total of around EUR 1.842 million, of which Telefonica will pay some EUR 1.243 million, said the company.
