Piltel seen finalizing debt restructuring deal with Marubeni

Cash-strapped firm Pilipino Telephone Corp. (Piltel) expects to finalize its debt restructuring arrangement with Marubeni Corp. of Japan by yearend or early 2001.

Napoleon Nazareno, Piltel president and chief executive officer, said over the weekend that talks between the two parties are finally going on positively.

"We’ve been holding a series of meetings and Marubeni has more or less displayed an open attitude towards the debt rehabilitation plan so we are hoping that everything will be completed within the year or early next year," he said.

Nazareno, however, refused to reveal details of the negotiations and whether Piltel revised its proposal to Marubeni which the latter had refused.

Marubeni, Piltel’s major creditor, has been seeking a better deal than what the cellular firm has offered the banks and bond holders but which Nazareno earlier said they could not afford to provide.

Reports said that Marubeni wants cash payment for the $279-million (P11.2-billion) loan it provided to Piltel to finance the latter’s local exchange network in Mindanao.

"Marubeni has very little choice. Whatever they want, we... cannot do. The banks have already agreed to our proposal so we have to sit down with Marubeni and negotiate again to make them see the terms and conditions set by the banks," Nazareno said in an earlier interview.

Piltel’s mother company, Philippine Long Distance Telephone Co. (PLDT) already signed a master restructuring agreement (MRA) with several creditor banks last June.

The MRA defines the framework and main parameters for restructuring of Piltel’s bank obligations amounting to P13 billion. It also contains a letter of support from PLDT to be issued upon effectivity of the transaction amounting to as much as $150 million.

According to Nazareno, Piltel is already doing well and has significantly reduced its losses. Once the debt restructuring program is finished, the company, he said will be able to recover much faster.

"We are looking at a more favorable financial situation for Piltel in the next 24 months granting that the debt rehabilitation plan is completed," he said.

As of end of 1999, Piltel had a total liability of P34 million resulting from its inability to service its maturing obligations. – Marigold Yao-Endriga