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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of ____October, 2006
GRUPO IUSACELL, S.A. de C.V.
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(Translation of registrant's name into English)
Montes Urales 460
Col. Lomas de Chapultepec, Deleg. Miguel Hidalgo
11000, Mexico D.F.
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(Address of principal executive office)
Indicate by check mark whether the registrant files or will fill annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g-3-2(b) under the Securities and Exchange Act of
1934.
Yes [ ] No [X]
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Documents Furnished By the Registrant
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1. Press Release of the Registrant dated October 26, 2006
GRUPO IUSACELL ANNOUNCES RECORD NET INCOME OF PS. 4,199 MILLION DURING THIRD
QUARTER 2006
- Stockholders' Equity of Ps. 704 million -
- EBITDA increases by 72% to Ps. 332 million -
- Convenio concursal signed with majority of creditors -
MEXICO CITY, Oct. 26 /PRNewswire-FirstCall/ -- Grupo Iusacell, S.A. de
C.V. (BMV: CEL), reported its financial results for the third quarter of 2006.
"We have had enormous accomplishments in the Company during the quarter,
including historical maximums in revenues and EBITDA. We not only reached
agreements with the majority of our creditors, but during the quarter we
celebrated the convenio concursal of Grupo Iusacell that materialized the
agreements reached with the majority or our creditors," commented Gustavo
Guzman, CEO of Grupo Iusacell.
The Company reflected in its financial statements for the quarter the
following accounting and financial effects derived from the convenio concursal:
I. The cancellation of the debt originated by its US$ 350 million notes
due in 2006 (the "2006 Notes").
II. The issuance of new notes in the principal amount of US$ 175 million
with a maturity date of 2013 (the "New Notes").
III. The cancellation of all the past due interest for the 2006 Notes in
the amount of approximately US$ 183 million.
These cancellations affected a change on the Stockholders' Equity of the
Company, which increased from a negative Ps. $2,081 million in September 30,
2005 to Ps. 704 million in this quarter, as well as a decrease in the
liabilities of the Company of Ps $3,935 million.
Prior events in connection with the Grupo Iusacell Plan of Reorganization
- January 2006, Grupo Iusacell announces an agreement in principle with the
majority of its creditors.
- April 2006, Grupo Iusacell launches an exchange offer for the 2006 Notes.
- June 2006, Grupo Iusacell concludes the exchange offer with a
participation of approximately 90% of holders.
- June 2006, Grupo Iusacell announces its decision to implement a
restructuring by the filing of a plan of reorganization (convenio
concursal) (the "Plan of Reorganization") pursuant to the Mexican Business
Reorganization Act (Ley de Concursos Mercantiles).
- August 2006, the Mexican courts declare a concurso mercantil for Grupo
Iusacell, beginning the conciliation phase.
- August 2006, Grupo Iusacell executes its convenio concursal with
approximately 90% of Grupo Iusacell's creditors, which the company
expects, with the consent of the conciliator appointed by the Federal
Institute Specializing in Concursos Mercantiles (Instituto Federal de
Especialistas en Concursos Mercantiles -- IFECOM), to submit for approval
to a Mexican judge (Juzgado Septimo de Distrito en Materia Civil del
Primer Circuito).
Recent Events
Grupo Iusacell expects to execute soon its convenio concursal with creditors
of Grupo Iusacell Celular, S.A. de C.V.
On October 11, 2006, Grupo Iusacell announced that the restructuring of the
debt of its operating subsidiary, Grupo Iusacell Celular, S.A. de C.V.
("Iusacell Celular"), which includes US$ 190 million of Tranche A Bank Loans
("Tranche A Loans"), US$ 76 million of Tranche B Bank Loans ("Tranche B Loans")
and US$ 150 million of 10% Senior Notes due in 2004 (the "2004 Notes"),
continues advancing within the framework established by its strategic plan, and
that it anticipates that the restructuring agreement reached in principle with
the majority of its creditors will be legally finalized soon.
As a result of the exchange offer and consent solicitation launched in May
2006 that expired on July 26, 2006, more than 82% of creditors confirmed their
support of its Plan of Reorganization. Recently the levels of participation and
support increased to 97% of creditors.
The Iusacell Celular restructuring consists of an exchange of any and all of
its (a) Tranche A Loans for new senior floating rate first lien notes due 2011
accruing interest at three-month LIBOR plus 4.00% and (b) Tranche B Loans and
its 2004 Notes for its new 10% senior subordinated second lien notes due 2012,
on the terms and conditions that were previously announced.
Grupo Iusacell looks for consolidation of operations with Unefon
On September 6, 2006, Grupo Iusacell announced that its board of directors
authorized the company to explore the consolidation of operations with Unefon
(BMV: UNEFON), a mobile telephony operator for the mass market in Mexico and a
subsidiary of Unefon Holdings. Grupo Iusacell and Unefon are companies
controlled by Ricardo B. Salinas, and are the only two wireless communications
service providers with CDMA technology in Mexico, which allows for optimizing
the efficiency of the cellular telephony network.
Grupo Iusacell and Unefon have solid competitive advantages, and have
developed optimal attributes for the market segments in which they participate,
which translates into better services at lower prices. Grupo Iusacell has 2
million subscribers and Unefon 1.3 million, both nationwide.
Grupo Iusacell executes its convenio concursal with creditors
On August 28, 2006, Grupo Iusacell announced that it executed the convenio
concursal by a group of creditors representing approximately 90% of Grupo
Iusacell's total debt, which the company expects, with the consent of the
conciliator appointed by the Federal Institute Specializing in Concursos
Mercantiles (Instituto Federal de Especialistas en Concursos Mercantiles --
IFECOM), to submit for approval to a Mexican judge (Juzgado Septimo de Distrito
en Materia Civil del Primer Circuito). Among other things, upon the court's
approval of that submission, Grupo Iusacell's restructuring process will have
been completed.
The convenio concursal among Grupo Iusacell and its creditors was executed
in accordance with its previously announced restructuring agreement, which will
consist of the exchange of its 2006 Notes for an aggregate principal amount of
US$175 million of New Notes that will bear interest at an annual rate of 10%
(with semi-annual interest payments in arrears, including the option for
Iusacell to capitalize up to 40% of each interest payment). The restructuring
agreement also includes the cancellation of any default interest due and payable
under the 2006 Notes.
Iusacell announced the restructuring of its subsidiaries Iusacell
Infraestructura and Infraestructura Mexico
On July 14, 2006, Grupo Iusacell announced that its subsidiary Iusacell
Infraestructura S.A. de C.V. ("Iusacell Infraestructura") concluded the
successful restructuring of its debt with the signing of the corresponding
restructuring documentation.
Before the restructuring, Iusacell Infraestructura owed to BNP Paribas (Oslo
Branch) debt in an outstanding principal amount of US$ 26.6 million. This debt
consisted of: (1) a senior amortizing term facility in an outstanding principal
amount of US$ 23.2 million, guaranteed by the Export Import Bank of Norway and
due in 2007 and (2) a refaccionario loan in an outstanding principal amount of
US$ 3.4 million due in 2004.
On July 19, 2006, Iusacell Infraestructura de Mexico, S.A. de C.V.
("Infraestructura Mexico") a subsidiary of Grupo Iusacell, concluded the
successful restructuring of its debt with the signing of the corresponding
restructuring documentation.
Before the restructuring, Infraestructura Mexico owed to Harris S.A de C.V,
debt in an outstanding principal amount of US$ 4.3 million. This debt consisted
of: (1) Tranche 2D in an outstanding principal amount of US$ 4.0 million (the
"Tranche 2D"), and (2) Tranche 2E in an outstanding principal amount of US$ 0.3
million (the "Tranche 2E").
The terms of the restructuring signed are as follows:
Tranche 2D
A new principal amount owed under Tranche 2D of US$ 3.2 million due in 2010
that bear interest at a fix rate of 8% per annum. Interest shall be payable
quarterly, commencing March 31, 2007, and sixteen principal repayments shall be
made quarterly under the following schedule:
* 20% payable in calendar 2007, commencing March 31, 2007.
* 30% s payable in calendar 2008.
* 25% payable in calendar 2009, and
* 25% payable in calendar 2010.
Tranche 2E
Iusacell shall pay Tranche 2E, US$ 0.3 million in full on the effective date
of the Restructuring Agreement.
Results for Third Quarter 2006
Revenues
Net revenues in the third quarter of 2006 increased by 20% to Ps. $1,913
million, as compared to Ps $1,589 million during the same period 2005. This
increase is primarily as a result of growth in postpaid revenues as well as
higher revenues from value added services and an increase in the subscriber
base.
Iusacell ended the third quarter 2006 with approximately 2.0 million
subscribers, an increase of 19% as compared to the third quarter 2005.
Cost and Expenses
The total cost during the quarter increased by 23% to Ps. $1,125 million, as
compared to Ps $915 million in the third quarter 2005. Operating expenses
decreased by 5% to Ps. $455 million, as compared to Ps $481 million in the same
period 2005.
The increase in the total cost mainly reflects the increase in (i) handset
subsidy, (ii) cost related to value added services, and (iii) technical
expenses.
The decrease in the operating expenses during the quarter reflects the
result of the efforts and strategy for the control of expenses of the Company.
Operating income before depreciation and amortization
Iusacell's operating income before depreciation and amortization for the
third quarter of 2006 was Ps. $332 million, an increase of 72%, as compared to
Ps. $193 million during the same period the year before.
Net Income
Iusacell had a net income of Ps $4,199 million during the third quarter of
2006, as compared to a net loss of Ps $449 million registered in the same period
of 2005. The net income is mainly impelled by the gain registered as a result of
the decrease of the debt and cancellation of past due interest of the 2006
Notes.
Capital Expenditures
During the third quarter of 2006, the Company made investments of
approximately US$ 22 million, primarily for the acquisition of cellular
equipment related to the expansion of coverage and capacity of Iusacell 3-G
network and EV-DO services (Evolution Data Only).
About Iusacell
Grupo Iusacell, S.A. de C.V. (Iusacell, BMV: CEL) is a wireless cellular and
PCS service provider in Mexico with a national footprint. Iusacell offers more
and better voice communication and data services through state-of-the-art
technology, such as its new 3G network, throughout all of the regions in which
it operate. In addition to our core mobile telephony services, we also provide a
wide range of other telecommunications services, including long distance,
wireless local telephony and data transmission services. Additional information
is available at www.iusacell.com. Grupo Iusacell it's a company of Grupo
Salinas, for additional information please visit: www.gruposalinas.com
Legal Disclaimer
Grupo Iusacell, S.A. de C.V. quarterly reports and all other written
materials may from time to time contain statements about expected future events
and financial results that are forward-looking and subject to risks and
uncertainties. For those statements, the Company claims the protection of the
safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. A discussion of factors that may affect future
results is contained in our filings with the Securities and Exchange Commission.
Attached are the Consolidated Income Statements of each of Grupo Iusacell,
S.A. de C.V. and Grupo Iusacell Celular, S.A. de C.V. for the three-month and
nine-month periods ended September 30, 2006, and the Consolidated Balance
Sheet of Grupo Iusacell, S.A. de C.V. and Grupo Iusacell Celular, S.A. de C.V.
at September 30, 2006.
GRUPO IUSACELL, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
MILLIONS OF MEXICAN PESOS OF SEPTEMBER 30, 2006 PURCHASING POWER
3Q05 3Q06 Change
---------------------- ---------------------- ----------------------
Gross Revenues 1,680 106% 2,019 106% 340 20%
Commissions (90) (6)% (106) (6)% (16) (18)%
Net Revenues 1,589 100% 1,913 100% 324 20%
Cost of services 734 46% 799 42% 64 9%
Handsets Subsidy 181 11% 327 17% 146 81%
Total Cost 915 58% 1,125 59% 210 23%
Gross Profit 674 42% 788 41% 113 17%
Selling, General &
Administrative Expenses 481 30% 455 24% (25) (5)%
EBITDA 193 12% 332 17% 139 72%
Depreciation and
Amortization 382 24% 376 20% (6) (2)%
(Loss) income from
sale of fixed assets
and other expenses (19) (1)% 3 0% 23 117%
Debt extinguishment -- 0% 3,935 206% 3,935 n.a.
Comprehensive Financing Cost
Interest Expense - Net (284) (18)% (275) (14)% 9 3%
Exchange (loss) gain (20) (1)% 382 20% 402 n.m.
Gain from net monetary
position 79 5% 193 10% 115 146%
(225) (14)% 301 16% 525 n.m.
(Loss) Income
Before Taxes (433) (27)% 4,196 219% 4,628 n.m.
Tax Provision (14) (1)% 1 0% 15 110%
Minority Interest (3) (0)% 2 0% 5 167%
Net (Loss) Income (449) (28)% 4,199 219% 4,648 n.m.
PER SHARE INFORMATION
Weighted Average of
Outstanding Shares
(000) 93,425 93,425 -- 0%
Quarter Earnings
(Losses) per
Share (Pesos) (4.81) 44.95 49.76 n.m.
GRUPO IUSACELL, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
MILLIONS OF MEXICAN PESOS OF SEPTEMBER 30, 2006 PURCHASING POWER
9M05 9M06 Change
----------------------- ----------------------- ----------------------
Gross Revenues 4,765 107% 5,929 106% 1,163 24%
Commissions (298) (7)% (315) (6)% (17) (6)%
Net Revenues 4,467 100% 5,614 100% 1,146 26%
Cost of services 1,974 44% 2,395 43% 422 21%
Handsets Subsidy 406 9% 969 17% 563 139%
Total Cost 2,380 53% 3,364 60% 984 41%
Gross Profit 2,088 47% 2,250 40% 162 8%
Selling, General &
Administrative Expenses 1,302 29% 1,337 24% 35 3%
EBITDA 786 18% 913 16% 127 16%
Depreciation and
Amortization 1,189 27% 1,160 21% (29) (2)%
(Loss) income from sale
of fixed assets and
other expenses (44) (1)% 171 3% 214 n.m.
Debt extinguishment -- 0% 3,935 70% 3,935 n.a.
Comprehensive Financing Cost
Interest Expense - Net (849) (19)% (876) (16)% (27) (3)%
Exchange (loss) gain 392 9% (383) (7)% (775) (198)%
Gain from net monetary
position 115 3% 221 4% 106 92%
(341) (8)% (1,038) (18)% (697) n.m.
(Loss) Income
Before Taxes (788) (18)% 2,821 50% 3,609 n.m.
Tax Provision (73) (2)% 0 0% 73 100%
Minority Interest (4) (0)% 5 0% 9 n.m.
Net (Loss) Income (865) (19)% 2,826 50% 3,691 n.m.
Last Twelve Months
EBITDA 760 1,187 427 56%
Last Twelve Months Net
(Loss) Income (1,246) 2,972 4,218 n.m.
PER SHARE INFORMATION
Weighted Average of
Outstanding Shares
(000) 93,425 93,425 -- 0%
LTM Earnings
(Losses) per
Share (Pesos) (13.34) 31.81 45.15 n.m.
GRUPO IUSACELL, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MILLIONS OF MEXICAN PESOS OF SEPTEMBER 30, 2006
PURCHASING POWER
As of September 30 of
------------------------------------------------
2005 2006 Change
---------------------- --------------------- ----------------------
Cash and cash equivalents 13 0% 46 0% 33 244%
Customers 388 4% 529 5% 141 36%
Other accounts receivable -- 0% 278 3% 278 n.a.
Advanced payments and
other receivables 351 3% 240 2% (111) (32)%
Unamortized handset
subsidy 452 4% 441 4% (12) (3)%
Inventories 15 0% 51 0% 36 248%
Current assets 1,219 11% 1,584 14% 365 30%
Fixed assets 6,616 61% 5,755 52% (861) (13)%
Goodwill 1,892 17% 1,892 17% -- 0%
Other assets 1,086 10% 1,804 16% 717 66%
TOTAL ASSETS 10,814 100% 11,035 100% 221 2%
Short-term debt 8,846 82% 4,586 42% (4,260) (48)%
Accrued interests 2,249 21% 927 8% (1,322) (59)%
Short-term liabilities
with financial cost 11,095 103% 5,512 50% (5,583) (50)%
Suppliers 454 4% 399 4% (55) (12)%
Unaccrued air time 116 1% 119 1% 3 3%
Accumulated expenses
and other payables 1,229 11% 1,197 11% (31) (3)%
Short-term liabilities
without financial cost 1,799 17% 1,716 16% (84) (5)%
Short-term liabilities 12,894 119% 7,228 65% (5,666) (44)%
Long-term debt 1 0% 2,230 20% 2,229 n.m.
Long-term liabilities
with financial cost 1 0% 2,230 20% 2,229 n.m.
Advances from customers -- 0% 873 8% 873 n.a.
Deferred credits -- 0% 873 8% 873 n.a.
TOTAL LIABILITIES 12,896 119% 10,331 94% (2,565) (20)%
STOCKHOLDERS' EQUITY (2,081) (19)% 704 6% 2,786 (134)%
LIABILITIES + EQUITY 10,814 100% 11,035 100% 221 2%
GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
MILLIONS OF MEXICAN PESOS OF SEPTEMBER 30, 2006 PURCHASING POWER
3Q05 3Q06 Change
----------------------- ----------------------- -----------------------
Gross Revenues 1,716 106% 2,103 105% 387 23%
Commissions (90) (6)% (106) (5)% (16) (18)%
Net Revenues 1,625 100% 1,996 100% 371 23%
Cost of services 750 46% 856 43% 105 14%
Handsets Subsidy 181 11% 327 16% 146 81%
Total Cost 931 57% 1,182 59% 251 27%
Gross Profit 694 43% 814 41% 120 17%
Selling, General &
Administrative Expenses 470 29% 450 23% (21) (4)%
EBITDA 224 14% 364 18% 140 63%
Depreciation and
Amortization 345 21% 337 17% (8) (2)%
(Loss) income from
sale of fixed assets
and other expenses (11) (1)% (69) (3)% (58) n.m.
Comprehensive Financing Cost
Interest Expense - Net (136) (8)% (174) (9)% (38) (28)%
Exchange (loss) gain (12) (1)% 155 8% 167 n.m.
Gain from net monetary
position 13 1% 79 4% 66 n.m
(135) (8)% 59 3% 194 (144)%
(Loss) Income
Before Taxes (266) (16)% 18 1% 284 (107)%
Tax Provision (14) (1)% (126) (6)% (112) n.m.
Minority Interest (3) (0)% 2 0% 5 167%
Net (Loss) Income (283) (17)% (107) (5)% 176 (62)%
GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
MILLIONS OF MEXICAN PESOS OF SEPTEMBER 30, 2006 PURCHASING POWER
9M05 9M06 Change
----------------------- ----------------------- -----------------------
Gross Revenues 4,888 106% 6,154 105% 1,266 26%
Commissions (298) (6)% (315) (5)% (17) (6)%
Net Revenues 4,590 100% 5,839 100% 1,248 27%
Cost of services 2,145 47% 2,579 44% 434 20%
Handsets Subsidy 406 9% 969 17% 563 139%
Total Cost 2,551 56% 3,547 61% 997 39%
Gross Profit 2,040 44% 2,291 39% 252 12%
Selling, General &
Administrative Expenses 1,278 28% 1,312 22% 34 3%
EBITDA 761 17% 979 17% 218 29%
Depreciation and
Amortization 1,074 23% 1,044 18% (30) (3)%
(Loss) income from
sale of fixed assets
and other expenses (35) (1)% 95 2% 130 n.m.
Comprehensive Financing Cost
Interest Expense - Net (377) (8)% (474) (8)% (97) (26)%
Exchange (loss) gain 190 4% (206) (4)% (396) n.m.
Gain from net monetary
position 35 1% 91 2% 56 161%
(152) (3)% (589) (10)% (437) n.m.
(Loss) Income Before
Taxes (500) (11)% (559) (10)% (59) 12%
Tax Provision (73) (2)% (239) (4)% (166) n.m.
Minority Interest (4) (0)% 5 0% 9 n.m.
Net (Loss) Income (577) (13)% (793) (14)% (216) 37%
GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MILLIONS OF MEXICAN PESOS OF SEPTEMBER 30, 2006
PURCHASING POWER
As of September 30 of
-----------------------------------------------
2005 2006 Change
--------------------- ---------------------- -----------------------
Cash and cash
equivalents 2 0% 42 0% 40 n.m.
Customers 389 4% 538 5% 149 38%
Other accounts receivable 276 3% 823 8% 547 198%
Advanced payments and
other receivables 300 3% 165 2% (135) (45)%
Unamortized handset
subsidy 452 5% 441 4% (12) (3)%
Inventories 15 0% 51 1% 36 248%
Current assets 1,433 15% 2,059 21% 626 44%
Fixed assets 6,088 63% 4,929 50% (1,159) (19)%
Goodwill 1,699 18% 1,699 17% -- 0%
Other assets 425 4% 1,173 12% 748 176%
TOTAL ASSETS 9,645 100% 9,860 100% 215 2%
Short-term debt 4,641 48% 4,568 46% (73) (2)%
Accrued interests 526 5% 754 8% 228 43%
Short-term liabilities
with financial cost 5,166 54% 5,321 54% 155 3%
Suppliers 402 4% 152 2% (250) (62)%
Unaccrued air time 116 1% 119 1% 3 3%
Accumulated expenses and
other payables 974 10% 1,313 13% 339 35%
Short-term liabilities
without financial cost 1,493 15% 1,584 16% 92 6%
Short-term liabilities 6,659 69% 6,906 70% 247 4%
Long-term debt 0 0% -- 0% (0) (100)%
Long-term liabilities
with financial cost 0 0% -- 0% (0) (100)%
Advances from customers -- 0% 796 8% 796 n.a.
Deferred credits -- 0% 796 8% 796 n.a.
TOTAL LIABILITIES 6,659 69% 7,701 78% 1,042 16%
STOCKHOLDERS' EQUITY 2,986 31% 2,159 22% (827) (28)%
LIABILITIES + EQUITY 9,645 100% 9,860 100% 215 2%
SOURCE Grupo Iusacell, S.A. de C.V.
-0- 10/26/2006
/CONTACT: Jose Luis Riera K., Chief Financial Officer,
+011-52-55-5109-5927, or vferrer@iusacell.com.mx , or J. Victor Ferrer V.,
Finance Manager, +011-52-55-5109-5273, or vferrer@iusacell.com.mx , both of
Grupo Iusacell S.A. de C.V./
/Web site: http://www.iusacell.com /
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GRUPO IUSACELL, S.A. DE C.V.
Date: October 26, 2006
/s/ Fernando Cabrera
---------------------
Name: Fernando Cabrera
Title: Attorney in fact
/s/ Jose Luis Riera
---------------------
Name: Jose Luis Riera
Title: Attorney in fact