Telefonica threatened legal action against Millicom if it aborts a purchase of the Spanish company’s Costa Rica mobile operations in a deal worth $570 million.

In a note to the Spanish National Securities Market Commission, Telefonica said Millicom had breached a sale agreement reached in February 2019 by refusing to close the transaction.

Telefonica stated it informed Millicom of its decision to file a lawsuit with a court in the US State of New York to demand compliance with the contract, and planned to seek compensation for “all the damages that this unjustified breach could cause Telefonica”.

The case will be filed once courts reopen doors for non-emergency actions following the Covid-19 (coronavirus) pandemic.

Telefonica said it agreed to sell the Costa Rica mobile operation for $570 million, subject to adjustments. It noted the unit was performing strongly, with an operating income of €235 million ($255.6 million) in 2019.

Millicom denied Telefonica’s assertion, arguing the deal was still awaiting regulatory approvals, which were due to be issued by 1 May.

But the company noted if approvals were not granted by that date, it intended to terminate the contract: it pledged to “vigorously defend any action brought by Telefonica in this matter”.