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 Business News | August 2005 
Mexico's Iusacell to Launch New Products, Services
 Reuters
| | Controversial tycoon Ricardo Salinas |
Mexico City - Cellular phone company Iusacell, fighting delisting from Mexico's stock exchange, said on Wednesday it will launch new products and services in a bid to escape from under a pile of debt.
The company's two-step plan includes restructuring debt and launching new services and products to increase network reach and boost its client base.
Iusacell, owned by controversial tycoon Ricardo Salinas, said the Mexican Stock Exchange had notified it on July 8 it was trading below a minimum capitalization level of about $5 million required for public companies.
Iusacell has struggled for the past two years to renegotiate close to $800 million in debt. Wednesday's release did not say when it could reach a deal with creditors.
When Salinas bought Iusacell in 2003, he promised to come up with a detailed business plan to expand the firm's footing in the highly competitive Mexican market, where it runs against America Movil and Movistar, a unit of Spain's Telefonica .
But the businessman, who faces fraud charges in the United States for his involvement in a debt deal at another of his companies, has not yet delivered such a broad strategy.
Iusacell reported a 26 percent increase in second-quarter revenue and helped by foreign exchange gains the firm trimmed its net loss substantially, but it is still the company with the fewest clients of all four cellular providers in Mexico.
Iusacell's American Depositary Receipts are in the process of being delisted from the New York Stock Exchange.
In May, Salinas decided to pull Iusacell and two other of his companies, retailer Elektra and broadcaster TV Azteca, from Wall Street citing cost concerns.
The move was seen by many analysts as an attempt to dodge tight monitoring from U.S. regulators.
Iusacell shares finished flat at $28.50 on Wednesday. |
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