Investor Presentaiton
159
139
ANNUAL INTEGRATED REPORT 2021 | AXTEL
to thousands of Mexican pesos at the closing exchange rate as of
December 31, 2021, 2020 and 2019.
MXP)
2020
USD
(converted to
thousands of
USD
(converted to
thousands of
MXP)
2021
USD
(converted to
thousands of
MXP)
2019
Financial assets
$
Financial liabilities
714,540
(10,971,150)
$ 3,075,425
(12,217,941)
$
701,548
(11,019,701)
Foreign exchange
$ (9,142,516)
monetary position
$ (10,256,610)
$ (10,318,153)
During 2021, 2020 and 2019, Axtel contracted several derivative
financial instruments, mainly forwards, to hedge this risk. These
derivatives have been designated at fair value with changes through
profit or loss for accounting purposes as explained in the next section
of this note.
Based on the financial positions in foreign currency maintained
by the Company, a hypothetical variation of 10% in the MXN/USD
exchange rate and keeping all other variables constant, would result
in an effect of $1,025,661 on the consolidated statement of income
and consequently on the stockholders' equity.
Financial instruments and derivative financial instruments
Financial instruments
As of December 31, 2019, the Company had Over the Counter (OTC)
transaction agreements with Bank of America Merrill Lynch (BAML),
denominated "Zero Strike Call" or options, at a price closely resembling
zero. The asset underlying these instruments is the market value of
Axtel's CPOs. The contracts signed prior to October 2016 can only
be settled in cash. As from that date, the term of the contracts yet
to be settled was extended and as a result of this negotiation, the
settlement method can be in cash or in shares, as decided by the
Company. The original term of these contracts is 6 months and can be
extended by mutual agreement between the parties; however, as this
is an American type option, the Company can exercise it at any given
time prior to the date of maturity.
According to the contracts, in case of deciding for payment in cash,
the amount to be settled will be calculated as per the following
formula: Number of options per option right per (reference price -
exercise price).
Where:
Number of options = defined in the contract
Right of option = defined as 1 "share" per option, defining "share" as
Bloomberg Code Axtel CPO MM.
Reference price = "The price per share that GBM receives upon settling
the position of the hedges thereof, under commercially reasonable
terms, discounting commissions and taxes".
Exercise price = 0.000001 pesos
The Company determined the classification and measurement of
these contracts as financial assets at fair value with changes through
profit or loss.
As of December 31, 2020 and 2019, the lending position of the options
represents the maximum amount of its credit exposure, as showed below:
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