Telefonica and Claro pay USD 1.6 billion fine in Colombia

Telefónica and Claro paid the CO$ 4.7 billion (USD 1.6 billion) fine that was ordered by an Arbitration Court for failing to meet contractual conditions for cellular services. Colombia’s Minister of Finance and Public Credit, Mauricio Cárdenas, said the money will be used to reduce the country’s external financing needs for next year.

Claro (América Móvil) made a payment of over USD 600 million and CO$ 1.3 billion to reach CO$ 3.1 billion. For its part, Telefonica paid close to USD 380 million, according to the Minister.

Recently, the Shareholders Meeting of Colombia Telecomunicaciones approved the capitalization of the company for CO$ 6,45 billion (USD 2.2 billion), with the aim of settling the outstanding liability with Patrimonio Autónomo Receptor de Activos de la Empresa Nacional de Telecomunicaciones en Liquidación y Las Empresas Teleasociadas en Liquidación, or PARAPAT, and paying the arbitral award issued against the company.  Telefónica, with 67.5% of ownership, will provide resources in cash of CO$ 4.35 billion (USD 1.5 billion). The remaining 32.5% belongs to the Republic of Colombia- Ministry of Finance (MHCP).

In July, an arbitration court determined that the reversion of assets clause of cellular mobile telephone concession contracts subscribed in 1994 between the State and the operators is still effective; therefore, the companies must compensate the nation.