United States

Terra Towers optimistic despite legal predicament

Bnamericas Published: Thursday, April 29, 2021

Despite court actions involving allegations of a squeeze-out merger, Continental Towers' main shareholder, Terra Towers, which has multiple Latin American operations, remains optimistic.

Enrique Canton, Terra Towers executive and spokesperson, told BNamericas that the company seeks to retain its leadership position in the region.

He said especially the telecoms towers market has been very active due to favorable policies and attempts to close the digital divide, greater technological adoption and a pandemic that forces networks to reconfigure. "Traffic increased in residential areas where today there are fewer towers deployed," he said.

Canton added Terra Towers plans to catch up with market demand, while remaining disciplined in its cost structure. "We look forward to continuing to operate our tower portfolio and increase profitability in the countries we operate in," he added.

The company mulls capitalization through debt or equity, although that will depend on the business opportunities.

Continental Towers’ majority shareholders have recently filed a legal action against Torrecom Partners, based in Broward County, US, alleging a conspiracy to reduce the value of the company to force a merger.

The group alleges involvement of minority shareholders Goldman Sachs and Peppertree Capital Management.

Terra Towers has accused shareholders of stage-managing a merger since 2017. The company said board members linked to Goldman and Peppertree systematically blocked growth opportunities, including an agreement with Telefónica to build 200 towers in Guatemala and Nicaragua.

According to the accusations, Goldman Sachs planned to help Torrecom finance the Continental acquisition, creating a conflict of interest.

The dispute in the US also puts some plans on hold. "Today the priority is on how it is resolved in court," Canton said of the offer submitted by one minority shareholder.

Continental Towers has a presence in Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Colombia and Peru.

The dispute comes as the towers market is consolidating.

IHS Towers previously announced the closing of the acquisition of Skysites, a provider of urban infrastructure for telecommunications and small cells in Brazil. Before that, it bought Cell Site Solutions, with assets in Brazil, Peru and Colombia.

American Tower, meanwhile, bought the inSite Wireless Group for US$3.5bn.

In another transaction, Highline bought over 600 sites from Brazil's Oi and signed a definitive agreement to acquire Phoenix Tower do Brasil.

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