America Movil supports KPN rights issue with conditions
PARIS (Reuters) - America Movil (AMXL.MX), the largest shareholder of Dutch telecom operator KPN (KPN.AS), said it would support KPN's planned capital increase and would appoint two members of the board subject to shareholder vote.
American Movil also said that it had reached an "indefinite" agreement with KPN not to take its ownership past the 30 percent threshold that would trigger a required offer to buy out the entire group.
The moves are a sign that Carlos Slim, the world's richest man and founder of the Latin American telecom giant, is willing to add to his 3 billion-euro investment in KPN despite incurring a massive paper loss since buying his shares at around 8 euros last summer.
Slim's Latin American telecom giant bought a 28 percent stake in The Hague-based KPN last year. KPN shares closed at 3.228 euros on Tuesday.
KPN said the 4 billion-euro ($5.34 billion) operation would consist of a 3 billion-euro rights issue and the issuance of hybrid capital instruments, which were expected to receive partial equity recognition.
America Movil said in a statement to Mexico's stock exchange on Tuesday that it was participating in the offer "with a view to strengthening KPN's capital base, maintaining the fundamentals that support KPN's investment grade (rating) and allowing KPN to pursue valuable strategic initiatives".
The agreement can be terminated by either party with two months' notice, America Movil said, although KPN may not break the agreement within its first two years.
($1 = 0.7487 euros)
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