PLDT’s investments will be made through its wholly-owned subsidiary ePLDT, Inc. which has agreed to spend $12 million (P600 million) to acquire convertible redeemable preferred stocks of SIHI equivalent to 22.5 percent of the firm’s issued capital.
SIHI is the parent company of Stradcom Corp. which has an existing concession agreement with the Philippine government for the nationwide computerization of the Land Transportation Office (LTO).
The securities are convertible into shares of common stock of SIHI and, upon conversion, will be equivalent to 22.5 percent of SIHI’s total issued and outstanding common stock on a fully diluted basis. The completion of the investment in the securities is subject to the fulfillment of certain conditions.
The International Finance Corp. (IFC), the investment arm of the World Bank, has also agreed to invest in convertible redeemable preferred stocks of SIHI on substantially the same terms and conditions as ePLDT’s investment.
The IFC investment, upon conversion, will be equivalent to 15 percent of SIHI’s total issued and outstanding capital stock on a fully diluted basis. IFC has also agreed to extend a $12 million loan to Stradcom.
ePLDT’s investment in SIHI is part of its ongoing strategy to seek strategic investments in IT related services. ePLDT is also in discussions with Stradcom for the provision of business recovery solution services through Vitro, ePLDT’s Internet data center.
PLDT, ePLDT’s parent company, is also providing Stradcom with the required nationwide connectivity for its LTO project.
ePLDT, which was formed in August 2000, is the principal vehicle for PLDT’s Internet, e-commerce and multi-media businesses and will eventually serve as the holding company for PLDT’s existing interests in a number of businesses, including the cable television operator, Home Cable, and the Internet Service Provider, Infocom.
It also operates Vitro and holds a majority share in Contact World, a call center joint-venture that commenced operations in late last year. ePLDT also has a 51-percent interest in e-yellowpages.ph, an online directory service portal; a 45-percent interest in Mind Stream, Inc., which provides IT education; a 20.5-percent stake in the B2B exchange BayanTrade.com, and has formed a partnership to launch Visa Cash smart cards.