...The upgrade reflects capitalization by Colombia Telecomunicaciones S.A. E.S.P.'s (ColTel) shareholders on its former payment liability to Patrimonio Autonomo Receptor de Activos of Empresa Nacional de Telecomunicaciones (PARAPAT) and the effect on ColTel's balance sheet and cash flow. Telefonica S.A.'s (TEF) sizable cash injection in 2017 and the government's assumption of its portion of the liability strengthened ColTel's balance sheet, resulting in material debt reduction. The capitalization also freed approximately COP500 billion per year previously destined to service PARAPAT that will now contribute to the company's expected cash flow from operations (CFFO) and deleveraging strategy. The consolidation of leading telecom fixed operations in Bucaramanga and Barranquilla since fourth-quarter 2017, and the termination of the PARAPAT operation agreement, will contribute to improved EBITDA performance. Fitch Ratings believes that towers and real estate properties that came from PARAPAT can...
