Home » Mexican Internet Company Owner Accused of Favoring Local Investors: Lack of Transparency with Foreign Creditors

Mexican Internet Company Owner Accused of Favoring Local Investors: Lack of Transparency with Foreign Creditors

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Mexican Internet Company Owner Accused of Favoring Local Investors: Lack of Transparency with Foreign Creditors

The owner of Mexican internet company Total Play, Ricardo Salinas Pliego, is facing accusations of giving preference to local investors and lack of transparency with foreign creditors. According to reports from Bloomberg, a recent private agreement with Mexican investors led by Grupo ICEL has left foreign creditors in an unfavorable position in the event of company insolvency.

Total Play’s bonds were already struggling in emerging markets, and the announcement of the agreement caused further drops in their value, reaching a low of 50 cents on the dollar. The company later promised to offer a similar deal to global bondholders with covered bonds offering higher coupons, helping to stabilize prices around 54 cents.

Analysts, like Juan Djivelekian from Balanz in Buenos Aires, have pointed out the company’s preference for local investors and transparency issues with international holders. Grupo ICEL has become a crucial creditor for Total Play, representing 43% of total debt. While there is a possibility that remaining bonds could be redeemed on favorable terms, caution is advised due to the higher cost of debt potentially leading to worse conditions for future agreements with a broader base of holders.

Representatives from Salinas, Total Play, and Grupo ICEL have not yet responded to requests for comment. The agreement has raised concerns among international creditors of Total Play, highlighting uncertainties due to the company’s preference for local investors and lack of financial transparency.

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