WOM faces creditor objections in final stages of reorganization

In the final stages of WOM’s reorganization process, several companies have raised objections to certain aspects of the plan and the proposed cure amounts.

Last year, WOM reached an acquisition agreement with an ad hoc group (AHG) of noteholders, which includes a capital injection of up to US$500mn.

This week, Chile’s antitrust regulator, the FNE, launched a review of the consolidation proposal. The transaction involves the potential acquisition of WOM Mobile and its subsidiaries by the AHG through WOM Cayman and Alza AGF.

Meanwhile, creditors have filed objections to WOM’s plan, specifically regarding the assumption of licensing and billing agreements, as well as the associated cure amounts.

WOM’s largest tower lessor, Phoenix Tower International (PTI), which leases over 3,000 sites to the Chilean company, has criticized the cure amounts set by the debtors.

According to the assumption schedule, the debtors propose to assume all of their contracts with PTI and offer a cure amount of approximately US$44mn. However, PTI claims that the amount owed is no less than US$129mn.

“PTI believes that the cure amounts are significantly higher but has been engaged in constructive discussions with the debtors and their advisors (and more recently the Ad Hoc Group’s advisors) to negotiate the terms of the debtors’ and PTI’s go forward contracts and an agreement on cure amounts,” the company said in a statement.

AWS and Google have also objected to the proposed cure amounts. AWS disputes the amount of approximately US$150,000, stating that the proposal "does not include all amounts that are due and owing to AWS.” 

Meanwhile, Google objected to being assigned a cure of US$0, arguing that the monetary defaults under its contracts with WOM total at least US$9mn.

Other companies that have filed objections include Microsoft, Apple and Idemia, among others.