Facing billions in back taxes in Mexico and the US, TV Azteca announces bankruptcy proceedings

TV Azteca filed for bankruptcy protection on Thursday, taking a step that is typically a prelude to liquidation.

Shareholders approved the reorganization of company liabilities through a voluntary bankruptcy proceeding (a “concurso mercantil”), with the aim of restructuring financial obligations under judicial supervision.

Ricardo Salinas
Ricardo Salinas Pliego, TV Azteca’s billionaire owner, recently reached a deal with the SAT that requires him to pay US $1.86 billion in back taxes. (Edgar Negrete Lira/Cuartoscuro.com)

TV Azteca, owned by billionaire Ricardo Salinas Pliego, insists that this is not a bankruptcy, but is instead a preventative measure. The network said the decision was influenced by structural challenges facing the broadcast television business due to declining advertising revenue and pressure from digital platforms.

The network outlined a perfect storm of negative factors that pushed the company into these proceedings. The TV Azteca statement pointed to nearly 19 years of litigation and tax disputes, a “complex negotiation with international creditors,” the COVID-19 pandemic and the impact of 3.8 billion pesos (US $220.6 million) in government licensing fees paid in 2018.

Trading in the broadcaster’s shares on the Mexican Stock Exchange was suspended in 2023 after the company failed to file corporate results.

Salinas Pliego — who last month reached an agreement with the Mexican Tax Administration Service (SAT) to pay more than 32 billion pesos (US $1.86 billion) in overdue tax debts — refuted declarations that he was going bankrupt.

Responding to a Wednesday social media post by Jenaro Villamil, the director of the Mexican State Public Broadcasting System, Salinas Pliego said Villamil and his friends in the government “are messing with the wrong person.”

“We’ll see you all in 2030 and then you’ll find out if I’m bankrupt,” Salinas Pliego wrote, referencing the next presidential election, for which he is considered a potential candidate.

As for TV Azteca — Mexico’s second-biggest television broadcaster — El Universal columnist Mario Maldonado believes that behind the corporate message are significant obligations that explain the decision. 

“TV Azteca carries an estimated total debt of between US $2 billion and US $2.2 billion and, in addition, faces defaults to creditors in the United States for around US $600 million, a situation that has increased the legal and financial pressure on the company,” he wrote on Friday.

Maldonado said that whether the bankruptcy proceedings successfully stabilize the company “will depend on the cash flow the television station manages to generate in a shrinking advertising market.”

Rafael Rodríguez, TV Azteca’s CEO, implied just that in a statement. “This is a last‑resort tool aimed at preserving the value of the company, ensuring the continuity of its operations, and facilitating the orderly fulfillment of its obligations without interrupting its functioning,” he said.

Under Mexican law, the “concurso mercantil” aims to seek an agreement between the company and its creditors in order to avoid a shutdown in a process that typically lasts six months. If a procedure on restructuring debts can’t be agreed upon, the company’s assets would be sold off to pay creditors.

With reports from La Jornada, Proceso, El Universal and Reuters

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