Nextel International bares majority stake in local company

Beleaguered United States-based trunk radio company Nextel International bared before the US Securities and Exchange Commission (US SEC) that it owns close to 59 percent of its local operating company, Nextel Communications Philippines, Inc. (NCPI).

The disclosure was contained in Nextel’s 10-K, 10-Q and S1 reports to the US SEC. The reports are mandatory annual and quarterly disclosures filed by publicly-held companies in the US.

In the report, Nextel said its acquisition of the majority stake in Nextel Philippines "has not only increased our economic interest but also our ability to participate in the business and strategic development of this (Nextel Philippines) company."

Nextel is currently facing an investigation by the National Telecommunications Commission (NTC) in the wake of charges that it violated the Philippine constitutional cap on foreign ownership of vital utilities. The NTC said the local Nextel’s provisional authority could face possible suspension should prima facie evidence point to the alleged violation.

In a "show cause" order issued to Nextel, the NTC said, "It appears that (Nextel) has committed administrative offenses consisting of violations of certain provisions of the Constitution; the Public Service Act (Act 146) as amended; the Foreign Investment Act of 1991, as amended; the Rules and Regulations of this Commission, as well as certain conditions of its provisional authority."

In the same report to the US SEC, Nextel disclosed that it increased its ownership interest "in our Philippine operating company by purchasing additional minority owners’ equity interests for about $3.7 million."

Nextel also disclosed that its interests in Nextel Philippines are represented by Gamboa Holdings which holds about 20 percent of the outstanding shares of Nextel Philippines and Emerald Investments which holds about 28 percent.

Nextel said Gamboa Holdings is 60-percent owned by ACCRA Investments Corp. while Emerald Investments is 60-percent owned by ACCRAIN Holdings Corp.