The news comes following a plan to refinance $348 million in debt due in November, which came up short. Though the company hastens to add that this process “does not imply the liquidation or bankruptcy of the company”.
In Chapter 11 filings made in Delaware, the company said filing for bankruptcy would enable it to restructure to cover bond payments and continue to meet its network coverage commitments.
In a statement Chris Bannister, WOM’s CEO stated:
"After evaluating different scenarios to ensure the company's financial stability, we concluded that voluntarily filing for Chapter 11 is the best option to protect the company's value. We are focused on maximising WOM's commercial potential at long term, continue to provide the best service to our clients, protect our collaborators, fulfil our commitments to the Government and ensure that we have adequate liquidity to invest in our future growth."
Specifically, the filing allows WOM, which had approximately $1.8 billion in debt at the end of 2023, to keep operating while it develops a repayment plan, reported Bloomberg.
In a separate statement, the company confirmed that JPMorgan Chase & Co. had agreed to provide $200 million in financing.
"Our commitment to connect millions of Chileans to the largest 5G network in the country and thereby reduce the digital divide in Chile remains intact, as does our spirit as a company. We know that our arrival in Chile marked a before and after in the telecommunications market, we dared to offer fair prices for the benefit of millions of people, and we will continue working with the same passion that characterises us," adds Bannister.
In a fairly upbeat LinkedIn post Bannister wrote,” We have a great business, rising EBITDA we are number one for Customer Services and network quality … Let's continue to create a company that EVERYONE wants to belong to ...so JOIN US and let's .... Change Chile”.
