A top PLDT official told The STAR that the company is already assured of raising the $1.3 billion it needs to settle its maturing loan obligations this year up to 2004.
PLDT was earlier able to secure a $149-million loan from KfW of Germany. It also expects to get approval in the next few weeks from the Japan Bank of International Cooperation (JBIC) for an $80-million loan.
Right now, PLDT president and chief executive officer Manuel V. Pangilinan is in Europe as part of a roadshow presentation for the international offer of around $350 million in notes. The amount can be increased to as much as $500 million depending on the appetite of the market.
There will be two types of offering. The first one involves 10-year fixed rate notes due in 2012 and the other one involves five-year fixed rate notes due in 2007. PLDT has also initiated cash tender offers to purchase its outstanding 8.5-percent notes due in 2003 and 10.625-percent notes due in 2004. Credit Suisse First Boston Corp. and Morgan Stanley & Co. have been tapped by the telecom firm as dealer managers for the offers.
Considering the improved economic and financial climate in the country and the market’s attraction for offerings by local companies that have sound fundamentals, analysts expect a high yield for the PLDT notes.
Rival Globe Telecom earlier initiated a similar notes offering, which had a good take-up that the company had to increase the amount to $200 million.
PLDT was supposed to undertake the notes offering as early as September last year but has to postpone it following the terrorist attacks on the United States that devastated the financial markets.
Including the KfW and JBIC loan and the expected proceeds from the notes offering, PLDT can easily raise as much as $580 million from outside financing.
Earlier, Pangilinan said half of the $1.3 billion, or $650 million will be raised from external sources while the other half will be from internally generated cash flow.
An official told The STAR yesterday that including the expected dividends from its investments in Smart, savings, and earnings from operations, PLDT is now assured of raising $650 million or even more from cash flow.
PLDT was earlier in negotiations with the American International Group (AIG) for the sale of a five to 10-percent stake in Smart. AIG has been aggressively investing in telecommunications firms in the region.
Pangilinan said selling part of Smart, the PLDT group’s cash cow, is the last option for the telecom firm to raise funds for its liability management exercise.
PLDT insiders however said AIG continues to be interested in Smart but the talks will have to wait ‘because it appears that PLDT no longer needs it.’
For 2001, PLDT was able to increase its net income by a whopping 300 percent, fueled mainly by the continuing increase in subscriber take-up by Smart. PLDT owns 100 percent of Smart.