Mexican Axtel's share price plunges on Supreme Court decision
MEXICO CITY Oct 30 (Reuters) - Shares of Axtel SAB de CV plunged nearly 15 percent on Tuesday on media reports the Supreme Court had rejected the Mexican telecom's efforts to avoid paying interconnection fees to tycoon Carlos Slim's America Movil cell phone giant.
Local media reported that seven out of 10 Supreme Court judges on Monday backed up an earlier decision by the country's telecom watchdog Cofetel to throw out Axtel's appeal.
The company did not pay America Movil fees to connect calls from its fixed-line network to Slim's ever-expanding mobile network between 2005 and 2007.
A spokeswoman for the Supreme Court told Reuters that the final ruling is still pending and more discussions were ongoing.
"The company was not in a great shape and this (decision) leaves it in a worse situation," said Gerardo Copca, strategist at MetAnalisis consultancy in Mexico City.
In August, Axtel said it was considering selling assets and looking for additional investors to keep afloat.
The court's decision could seriously complicate the financial situation as Axtel would have to pay America Movil millions of dollars worth of fees that it did not anticipate.
"This is the biggest risk that the market is seeing, and is punishing the stock price," Copca added.
Axtel spokesman Julio Salinas said the company would wait for the Supreme Court's final ruling to analyze its situation.
Including Tuesday's dive, Axtel shares are down more than 30 percent year-to-date.
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