Six interested in investing in Hondutel

Six national and foreign companies are interested in investing in struggling Honduran state telco Hondutel, local daily La Prensa reported.

According to Eduardo Pavón, a member of the intervention committee that took control of the company in February, the government is waiting for a response from the Hondutel workers' union regarding its participation in the process of injecting capital into the ailing telco.

"There are national and international parties interested, but it is important to ensure that we will not encounter labor disputes," Pavón said.

Honduras' President Porfirio Lobo has stated that he wants Hondutel to have a strategic investor before the end of his government term in January 2014.

After years of corruption, financial mismanagement and an excessively large workforce, Hondutel has found itself in a financial crisis and competitively irrelevant in the market.

It is estimated that Hondutel needs a cash injection of US$500mn-600mn to put it on a competitive footing with Claroand Tigo.

The government held a tender in January this year for a 49% stake in Hondutel's mobile-focused JV Telefonía Móvil (Movitelh), however none of the 10 companies that purchased bidding rules presented offers.

In February, President Lobos appointed former Hondutel manager Jesús Castellanos to head up a so-called intervention committee to explore options of how to improve the company's finances, including selling off or renting assets pertaining to the company such as properties.

Castellanos was replaced in July by Rigoberto Romero and Eduardo Pavón. The intervention committee had presented an ambitious rescue plan to congress to inject US$200mn into the company to help meet a shortfall that has left the company behind on salary payments.

Congress dragged its feet on approving the plan and President Lobo said there was little point in propping up an entity which offers mainly fixed line services, suggesting that the idea of seeking a strategic partner was back on the table.

In a spectrum auction held at the beginning of October, the government reserved a spectrum block for Hondutel with the intention of sweetening the prospect for a future investor to be able to provide 4G services.

Earlier this month, the president of the congressional budget commission Francisco Rivera said Hondutel is expected to post a loss of more than 900mn lempiras (US$44mn) for 2013.