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To avoid bankruptcy and privatization, Bogotá telecoms operator ETB needs a 1tn-peso (US$568mn) capital injection for the next three years, city treasurer Héctor Zambrano was quoted as saying by news outlet Terra Colombia.
"ETB is not bankrupt, but needs a capital injection to remain competitive" and find a way out without having to sacrifice the company's shares, he told local radio station RCN.
While Zambrano had previously sided with the government to support selling shares in the company, he now insists that investments can save it.
"A couple of weeks ago, we were discussing how to find these resources, and selling shares was an option. But now we know that there is debt capacity," he added, recommending accessing international markets and other sources that can inject capital.
Also, the official did not rule out the possibility of alliances with other companies to offer products such as TV services, but denied rumors about a strategic partner search.
The government, on the other hand, insists on privatization as the best option for the company.
Former city treasurer Beatriz Arbeláez warned that if ETB does not revamp its structure and find a strategic partner, the company will soon start losing money.
Arbeláez resigned her position due to the strong opposition by Bogotá mayor Clara López Obregón to selling the municipal government's majority stake in ETB.
The city currently holds 86.6% of the company, while minority shareholders account for the remaining 13.4%.
ETB's net earnings of 36.7bn pesos during the first quarter of 2011 surged 354% in comparison to 8.08bn pesos in 1Q10, according to results released by the company.
The growth was thanks to lower expenses and data provisions. ETB's revenues from continued operations actually slipped 1.7% year-over-year, to 391bn pesos.