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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 April, 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
1. Press Release of the Registrant dated April 28, 2006
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[LOGO OF IUSACELL]
IUSACELL REPORTS FIRST QUARTER 2006 RESULTS
FIRST QUARTER RESULTS
---------------------
Mexico City, April 28, 2006 - Grupo Iusacell, S.A. de C.V. (BMV: CEL),
reported an increase of 32% in revenues for the first quarter of 2006.
RECENT EVENTS
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IUSACELL REACHES AN AGREEMENT TO RESTRUCTURE ITS DEBT.
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On January 23, 2006, Grupo Iusacell, S.A. de C.V. (Iusacell) and its main
operating subsidiary Grupo Iusacell Celular, S.A. de C.V. (Iusacell Celular)
announced that they have reached an agreement in principle with the majority of
their respective creditors to restructure their indebtedness.
GRUPO IUSACELL, S.A. DE C.V.
Iusacell reached an agreement in principle with creditors representing a
majority of the principal amount of its US$350 million 14.25% notes due in 2006
(the "Existing Notes") to exchange such notes for new notes.
The new notes to be issued in exchange for the existing notes will be in a
principal amount of US$175 million and will bear interest at an annual rate of
10% with semi-annual interest payments in arrears (with Iusacell having the
option to capitalize up to 40% of each interest payment) (the "New Notes"). The
maturity date for the New Notes will be December 31, 2013. It is contemplated
that the New Notes will be secured by a pledge on Iusacell shares, representing
between 28% and 34% of the fully-diluted common stock of the Company. The
granting of the pledge will be subject to certain terms and conditions.
The Existing Notes could be exchanged for the New Notes in the terms
described above. The Majority Creditors have agreed, subject to certain
conditions, including the negotiation of definitive documentation and the
achievement of various milestones, to timely tender their debt and consent to
the modification of certain terms and conditions of the Notes, pursuant to the
contemplated debt exchange offer and consent solicitation and other related
transactions. All Existing Notes tendered in the exchange offer will be
cancelled upon the consummation of the transaction, and past due interest on the
Existing Notes, will be forgiven.
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On April 18, 2006, Iusacell launched a solicitation of consents to exchange
any and all of Existing Notes for 10.00% senior secured notes due 2013, and
amend certain terms and conditions, waive certain existing defaults as well as
rescind acceleration under the indenture governing the Existing Notes.
Consummation of the offer is subject to certain customary conditions. The
offer is only made, and copies of any documents related thereto will only be
made available, to holders of Existing Notes that certify to Iusacell that they
are eligible to participate in the offer.
The exchange offer will expire at 5:00 PM, New York City Time, on
May 18, 2006, unless extended by Iusacell.
The Information and Exchange Agent for the exchange offer is Bondholder
Communications Group. The Information and Exchange Agent can be reached by email
at icalderon@bondcom.com, and its telephone numbers are (44) 207-382-4580 in
London or 212-809-2663 in New York.
GRUPO IUSACELL CELULAR, S.A. DE C.V.
Grupo Iusacell Celular, S.A. de C.V. reached an agreement in principle with
creditors representing the majority of its secured debt also involving an
exchange of the existing secured debt.
The agreement in principle contemplates that the US$190 million Existing
Tranche A loan be exchanged for US$190 million new first lien notes. Main terms
of the new first lien notes would include a first lien on substantially all of
Iusacell Celular's assets, in the terms and conditions of the existing lien,
with interest at Libor + 400 basis points, payable quarterly.
Further, under this agreement the US$76 million Existing Tranche B loan and
USD$150 million existing senior notes would be exchanged for approximately $203
million of new second lien notes. Main terms of the new second lien notes
include a second lien on substantially all of the assets of Iusacell Celular,
under the terms and conditions of the existing lien, interest at 10% per annum
with semi-annually payments (the Company will have the option to capitalize up
to 30% of each interest payment). All existing senior notes tendered in the
exchange offer will be cancelled upon the consummation of the transaction, and
past due interest on the existing senior notes, will be forgiven.
The New Notes, the New First Lien Notes and the New Second Lien Notes will
be issued pursuant to an exemption from the registration requirements of the
Securities Act of 1933. The exchange offers may be consummated as voluntary
exchanges or through any other legal means available to the Company and Iusacell
Celular, under applicable insolvency and business reorganization laws.
4
CONSOLIDATED FINANCIAL RESULTS
------------------------------
REVENUES
Revenues in the first quarter of 2006 grew 32% to Ps $1,811 million,
compared to Ps $1,377 million in the same period 2005. The increase is primarily
due to growth in postpaid revenues mainly due to an increase in the subscriber
base, as well as higher revenues from value added services and increase in air
time sales. Grupo Iusacell closed the first quarter of 2006 with 1.91 million
subscribers.
COSTS AND EXPENSES
Total costs increased during this quarter by 62% to $1,101 million pesos,
compared to $681 million pesos in first quarter 2005. Operating expenses
increased by 3% to $435 million pesos, compared to $420 million pesos in first
quarter of the previous year. The increase in total costs for the first quarter
2006 derives mainly from the increase in costs related to handset subsidies,
increase in the cost for value added services and technical expenses.
The increase in operating expenses for this quarter mainly reflects
increases in salaries due to increases in the number of full-time and part-time
employees, as well as the creation of regional sales structures and customer
care in keeping with our strategy of providing the best service for our
customers, maintenance fees and costs, offset by the reduction in advertising
expenses.
OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION
Iusacell's Operating Income Before Depreciation and Amortization for the
quarter was $275 million pesos, in line with the $276 million pesos registered
for the same period the year before.
NET INCOME
Iusacell registered a net loss of Ps$491 million pesos for the first
quarter of 2006, compared with a net loss of Ps$377 million registered for the
same period in 2005, reflecting an increase of 30% generated mainly by an
increase in integral financing costs affected mainly by the exchange loss
derived from the increase in exchange rates of the peso against the dollar.
CAPEX
During the first quarter of 2006, the Company made investments of
approximately US$11 million, applied mainly to the expansion of coverage and
capacity of Iusacell's 3-G network and EV-DO services (Evolution Data Only).
5
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THIS PRESS RELEASE IS NOT AN OFFER FOR SALE OF THE SECURITIES IN THE UNITED
STATES, MEXICO OR IN ANY OTHER JURISDICTION, AND NONE OF THE SECURITIES TO BE
ISSUED PURSUANT TO THE EXCHANGE OFFER, IF CONSUMMATED, MAY BE SOLD IN THE UNITED
STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR IN ANY OTHER JURISDICTION WHERE SUCH SALE
IS PROHIBITED. THE COMPANY DOES NOT INTEND TO REGISTER ANY OF THE SECURITIES TO
BE ISSUED PURSUANT TO THE EXCHANGE OFFER IN THE UNITED STATES OR TO CONDUCT A
PUBLIC OFFERING OF SUCH SECURITIES IN ANY JURISDICTION OTHER THAN THOSE AS IT
MAY FROM TIME TO TIME PUBLISH.
CONTACTS:
---------
JOSE LUIS RIERA K. J. VICTOR FERRER V.
Chief Financial Officer Finance Manager
GRUPO IUSACELL S.A. de C.V. GRUPO IUSACELL S.A. DE C.V.
+52 (55) 5109-5927 +52 (55) 5109-5273
6
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. Independent of the
negotiations towards the restructuring of its debt, Iusacell reinforces its
commitment with customers, employees and suppliers and guarantees the highest
quality standards in its daily operations offering 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.
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 period
ended March 31, 2006, and the Consolidated Balance Sheet of Grupo Iusacell, S.A.
de C.V. and Grupo Iusacell Celular, S.A. de C.V. at March 31, 2006.
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[LOGO OF IUSACELL]
GRUPO IUSACELL, S.A. DE C.V. AND SUBSIDIARIES
MILLIONS OF MEXICAN PESOS OF MARCH 31, 2006 PURCHASING POWER
(UNAUDITED FIGURES)
QUARTERLY INCOME STATEMENT
1Q05 1Q06 CHANGE
----------------------- ----------------------- -----------------------
Gross Revenues 108% 1,482 106% 1,923 441 30%
Commissions (8)% (105) (6)% (112) (7) (7)%
Net Revenues 100% 1,377 100% 1,811 434 32%
Cost of services 44% 602 44% 788 186 31%
Handset Subsidy 6% 79 17% 313 234 297%
Total Cost 49% 681 61% 1,101 420 62%
Gross Profit 51% 696 39% 710 14 2%
Operating Expenses 31% 420 24% 435 15 3%
Depreciation and Amortization 29% 398 22% 397 (0) (0)%
Total Expenses 59% 818 46% 832 14 2%
Operating Loss (9)% (122) (7)% (122) (0) (0)%
Operating Profit before Depreciation
and Amortization 20% 276 15% 275 (0) (0)%
Loss from sale of fixed assets and
other expenses (2)% (34) 9% 155 188 560%
Comprehensive Financing Cost
Interest Expense - Net (20)% (274) (16)% (286) (11) (4)%
Exchange gain (loss) (1)% (20) (18)% (327) (306) (n.m.)
Gain from net monetary position 6% 86 5% 87 1 2%
(15)% (209) (29)% (525) (316) (151)%
Loss befores taxes (26)% (364) (27)% (492) (128) (35)%
Tax Provisions (1)% (14) (0)% (0) 14 98%
Equity in income (loss) of subsidiaries 0% - (0)% (0) (0) (n.m.)
Minority interest 0% 1 0% 1 (0) (27)%
Net income (loss) (27)% (377) (27)% (491) (114) (30)%
======================= ======================= =======================
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[LOGO OF IUSACELL]
GRUPO IUSACELL, S.A. DE C.V. AND SUBSIDIARIES
MILLIONS OF MEXICAN PESOS OF MARCH 31, 2006 PURCHASING POWER
(UNAUDITED FIGURES)
1T05 1T06 CHANGE
----------------------- ----------------------- -----------------------
Cash and cash equivalents 3 0% 23 0% 19 n.m.
Customers 355 3% 385 4% 30 8%
Due from related parties 116 1% 44 0% (73) (62)%
Advanced payments and other receivables 318 3% 245 2% (73) (23)%
Unamortized handset subsidy 186 2% 441 4% 254 100%
Inventories 160 1% 67 1% (93) (58)%
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Current assets 1,139 10% 1,204 11% 65 6%
Fixed assets 7,087 63% 6,089 58% (998) (14)%
Goodwill - Net 1,871 17% 1,871 18% (0) (0)%
Other assets 1,099 10% 1,418 13% 319 29%
- 0%
Total assets 11,196 100% 10,582 100% (614) (5)%
Short-term debt 9,143 82% 8,636 82% (508) (6)%
Accrued interest 1,900 17% 2,603 25% 703 37%
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Short-term liabilities with financial cost 11,043 99% 11,239 106% 196 2%
Suppliers 309 3% 340 3% 31 10%
Related parties 250 2% 294 3% 45 18%
Unaccrued air time 150 1% 85 1% (65) (43)%
Accumulated expenses and other payables 1,011 9% 938 9% (72) (7)%
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Short-term liabilities without financial cost 1,720 15% 1,659 16% (61) (4)%
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SHORT-TERM LIABILITIES 12,763 114% 12,898 122% 135 1%
LONG-TERM LIABILITIES 26 0% - 0% (26) (100)%
Advances from customers - 268 3% 268 n.m.
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STOCKHOLDERS' EQUITY (1,594) (14)% (2,585) (24)% (991) (62)%
LIABILITIES + EQUITY 11,196 100% 10,582 100% (614) (5)%
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[LOGO OF IUSACELL]
GRUPO IUSACELL, S.A. DE C.V. AND SUBSIDIARIES
MILLIONS OF MEXICAN PESOS OF MARCH 31, 2006 PURCHASING POWER
(UNAUDITED FIGURES)
QUARTERLY INCOME STATEMENT
1Q05 1Q06 CHANGE
----------------------- ----------------------- -----------------------
Gross Revenues 107% 1,505 106% 1,989 484 32%
Commissions (7)% (105) (6)% (112) (7) (7)%
Net Revenues 100% 1,400 100% 1,877 476 34%
Cost of services 53% 747 45% 842 96 13%
Handset Subsidy 6% 79 17% 313 234 297%
Total Cost 59% 825 62% 1,155 330 40%
Gross Profit 41% 575 38% 722 147 26%
Operating Expenses 30% 415 23% 426 11 3%
Depreciation and Amortization 26% 360 19% 359 (1) (0)%
Total Expenses 55% 775 42% 786 10 1%
Operating Loss (14)% (200) (3)% (64) 137 68%
Operating Profit before Depreciation
and Amortization 11% 160 16% 295 136 85%
Loss from sale of fixed assets and
other expenses (2)% (34) 8% 156 189 562%
Comprehensive Financing Cost
Interest Expense - Net (8)% (114) (7)% (140) (26) (23)%
Exchange gain (loss) (1)% (10) (8)% (158) (148) (n.m.)
Gain from net monetary position 3% 36 2% 38 2 6%
(6)% (88) (14)% (260) (172) (197)%
Loss befores taxes (23)% (321) (9)% (168) 153 48%
Tax Provisions (1)% (14) 0% 0 14 101%
Equity in income (loss) of subsidiaries 0% - 0% - - 0%
Minority interest 0% 1 0% 1 (0) (27)%
Net income (loss) (24)% (334) (9)% (167) 167 50%
======================= ======================= =======================
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[LOGO OF IUSACELL]
GRUPO IUSACELL, S.A. DE C.V. AND SUBSIDIARIES
MILLIONS OF MEXICAN PESOS OF MARCH 31, 2006 PURCHASING POWER
(UNAUDITED FIGURES)
1T05 1T06 Change
----------------------- ----------------------- -----------------------
Cash and cash equivalents 2 0% 2 0% 0 13%
Customers 356 4% 386 4% 30 8%
Due from related parties 297 3% 546 6% 249 84%
Advanced payments and other receivables 254 3% 195 2% (59) (23)%
Unamortized handset subsidy 186 2% 441 5% 254 100%
Inventories 160 2% 67 1% (93) (58)%
----------------------- -----------------------
Current assets 1,255 13% 1,636 17% 381 30%
Fixed assets 6,500 66% 5,480 57% (1,020) (16)%
Goodwill - Net 1,680 17% 1,680 18% (0) (0)%
Other assets 455 5% 787 8% 332 73%
Total assets 9,890 100% 9,583 100% (308) (3)%
Short-term debt 4,797 48% 4,530 47% (266) (6)%
Accrued interest 431 4% 629 7% 197 46%
----------------------- -----------------------
Short-term liabilities with financial cost 5,228 53% 5,159 54% (69) (1)%
Suppliers 281 3% 274 3% (7) (3)%
Related parties 251 3% 542 6% 291 116%
Unaccrued air time 150 2% 85 1% (65) (43)%
Accumulated expenses and other payables 807 8% 575 6% (232) (29)%
----------------------- -----------------------
Short-term liabilities without financial cost 1,489 15% 1,476 15% (13) (1)%
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SHORT-TERM LIABILITIES 6,717 68% 6,635 69% (81) (1)%
LONG-TERM LIABILITIES 0 0% - 0% (0) (100)%
Advances from customers - 268 3% 268 100%
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STOCKHOLDERS' EQUITY 3,173 32% 2,679 28% (494) (16)%
LIABILITIES + EQUITY 9,890 100% 9,583 100% (308) (3)%
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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: April 28, 2006
/s/ Fernando Cabrera
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Name: Fernando Cabrera
Title: Attorney in fact
/s/ Jose Luis Riera
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Name: Jose Luis Riera
Title: Attorney in fact
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