Luxembourg based telco Millicom International Cellular has said that it will pull out of a proposed $570 million takeover of Telefonica’s assets in the Central American nation of Puerto Rico.
According to a report by news agency Reuters, Millicom gave no reason for its decision to back out of the deal.
“Millicom International Cellular S.A. announced today that it has exercised its right to terminate the Share Purchase Agreement (SPA) for the acquisition of Telefónica’s operating subsidiary in Costa Rica in accordance with the terms of the SPA.
“As communicated on April 29, 2020, closing of the SPA was conditioned upon the issuance of required regulatory approvals that were agreed by the parties and set forth in the SPA, certain of which have not yet been issued. The SPA establishes an end date of May 1, 2020, after which either party may terminate the agreement, and Millicom has exercised its right to do so,” the company said in a statement to the press.
At the end of April, Telefonica told members of the press that all the conditions for closing the deal had been met and that it would seek legal action against Millicom if it failed to complete the deal.
Telefonica is trying to divest its non core assets in a bit to reduce its debt pile which currently stands at over €37 billion.
Telefonica’s Costa Rican operations are part of a clutch of Central American subsidiaries that it had agreed to sell to Millicom for around $1.65 billion. The deal included operations in Panama and Nicaragua, which remain unaffected by Millicom’s decision to pull out of the Costa Rica deal.
As yet, neither Millicom or Telefonica have commented further on the news.