WOM, an ad hoc group of bondholders, and the unsecured creditors committee (UCC) have reached an agreement resulting in the ad hoc group’s withdrawal of its motion to dismiss the Chilean telecom’s Chapter 11 case.

The agreement was announced during a hearing held today (20 June) before Judge Karen Owens of the US Bankruptcy Court for the District of Delaware.

WOM announced as part of the deal that it will pay the fees and expenses of the ad hoc group’s advisors, said John Cunningham, a partner at White & Case representing WOM.

The holders will also have the right to participate as potential bidders in the process WOM plans to solicit bids for its assets, Cunningham said.

The agreement was announced this morning, but without any details, after several adjournments of the hearing to analyze, among other issues, the ad hoc group’s motion to dismiss. At that time, a counsel representing WOM asked to adjourn the hearing to 2pm ET, and later to 3pm ET.

On 23 April, the ad hoc bondholders filed the motion to dismiss the Chapter 11 case for lack of necessary jurisdiction, or alternatively, to appoint a Chapter 11 trustee.

Since then, WOM, the group of bondholders and the UCC fought over the proper jurisdiction for the company’s debt restructuring process.

According to Cunningham, the parties agreed to obtain approval of the settlement no later than 15 July, which was set as the settlement termination date.

As part of the agreement, the ad hoc group also withdrew its objections to WOM accessing the remaining of the debtor-in-possession (DIP) facility provided by JPMorgan Chase Bank.

WOM obtained interim authorization to access a portion of the DIP at the first-day hearing on 2 April. Of the total USD 210m, USD 100m was available upon entry of the interim DIP order.

As the company and the bondholders reached an agreement on a consensual basis, Judge Owens approved the final order for WOM to access the remaining USD 110m of the DIP.

The DIP matures 1 July 2025, and pays an interest rate of 10% per year, as reported. 

All the other objections filed by the ad hoc group – ordinary course of professional, cash management, taxes and insurance orders – will also be removed.

The objection against the UCC’s retention of Jefferies its investment banker was also will be also withdrawn.

WOM, formerly known as Nextel Chile, entered bankruptcy protection on 1 April, with USD 1.05bn in debt. The filing included WOM SA, Kenbourne Invest, NC Telecom II, WOM Mobile, Multikom SA and Conect SA.