ICE to inject US$15mn to cover Racsa's deficit

Thursday, June 2, 2011

Costa Rican state telco ICE will disburse US$15mn this year to keep its subsidiary, ISP Racsa, financially solvent, according to news site Telesemana.

Racsa has reportedly been facing financial troubles since it put an end to a contract signed with ISP Amnet, losing revenues and internet service customers.

In April, ICE injected an initial US$5.5mn into Racsa. Two additional installments, each for a similar amount, are planned by year-end, the news site reported.

Start your 15 day free trial now!


Already a subscriber? Please, login

Racsa may run US$11mn into the red by the end of 2011 if the situation does not improve. But ICE executive president Eduardo Doryan is confident that the situation will improve with "growing and unconditional support."

The company has been hit by unfavorable foreign exchange, Doryan added, besides losing almost half of its customer base.

Racsa sees about 70% of its revenues generated by product and service sales to the corporate and government sectors, with the remaining 30% coming from residential contracts - mostly internet connections, BNamericas previously reported. The firm has now turned to forming partnerships with other companies to provide new services in the face of market liberalization.