PLDT board supports Pangilinan

The Philippine Long Distance Telephone Co. (PLDT) board threw its full support yesterday behind president and chief executive officer Manuel V. Pangilinan and his leadership, dousing speculations that the board is now divided.

In a letter to the Philippine Stock Exchange, PLDT corporate secretary Lourdes Rausa-Chan said that an overwhelming majority of the members of the PLDT board, including the independent directors, said they remain fully united in their continuing support of Pangilinan and his leadership and efforts to revitalize and strengthen the operations and financial position of the company.

The PLDT board includes Antonio O. Cojuangco as chairman with members Pangilinan, Ray Espinosa, Helen Yuchengco-Dee, Corazon dela Paz (representing the Social Security System), Pedro Roxas, Napoleon Nazareno, and Fr. Bienvenido Nebres, Albert del Rosario, Taketo Suzuki and Mitsuhiro Takase (representing NTT Communications of Japan), Ricardo Zarate, and Chan.

It said that consistent with the company’s strategy to create value for all its shareholders, PLDT, under the able leadership of Pangilinan and the efforts of the management team, has completed its liability management program and remains focused on delivering strong operating results.

"We encourage the company’s management team and employees not to be affected and distracted by the irresponsible acts of certain sectors, which unfortunately have been dignified in newspaper reports, aimed at discrediting Mr. Pangilinan, portraying our board as being in discord, and fomenting distrust among the members of the board," Rausa said on behalf of the other board members.

There have been insinuations in other papers that Cojuangco is mounting a coup d’etat, backed up by First Pacific Co. Ltd. the controlling shareholder, against Pangilinan. It will be recalled that Pangilinan and Cojuangco led the PLDT board in opposing the sale by First Pacific of its 24.4 percent controlling stake in PLDT.

The board recently approved a five-year plan for PLDT which sets the direction for the company, aimed at strengthening it, increasing its profitability, improving operational efficiency, dominating ts markets, reducing overall debt, and enhancing shareholder value.

PLDT registered a first half financial performance that exceeded market expectations amidst the struggle for control with First Pacific and the Gokongwei group. During the first semester, the company posted a consolidated net income of P2.8 billion, or 100 percent higher than the profit posted in the same period last year, while its consolidated revenues nearly hit P40 billion.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) grew to P22.5 billion, withan EBITDA margin of 57 percent.

"The PLDT board has given its stamp of approval on the management team of PLDT led by our president, Manuel Pangilinan. It does not make any sense for the board to derail the positive performance of the company by ousting our president, especially now that we are on track to meet our yearend target," PLDT vice-president and spokesperson Menardo Jimenez Jr. said.

As this developed, First Pacific has not yet made up its mind on what to do with its Philippine investments following the collapse of an agreement with the Gokongwei group calling for the sale of its controlling interests in the PLDT and Bonifacio Land Corp.

Highly-placed sources told The STAR that First Pacific may just sit on any proposal it gets for the acquisition of its stakes in PLDT and Bonifacio Land until a definite decision has been made to accept other proposals.

A group which includes Greenfield Development Corp. of Jose Yao Campos and Ayala Corp. is already preparing to submit an offer calling for the assumption of a $109 million Metro Pacific Corp. loan secured by a 50.4 percent stake in Bonifacio Land.

Financial analysts, meanwhile, have expressed concern about First Pacific's future now that the Gokongweis have terminated the deal with First Pacific.

They said that although First Pacific controlling stakeholder Anthoni Salim may have temporarily solved his personal problems in Indonesia (Salim has a huge indebtedness to the Indonesian government), First Pacific still has loans maturing by the end of the year that it needs to fund.

Sources close to the transaction claim that the Larouge loan of $109 million (principal plus interest) given to Metro Pacific through First Pacific has to be paid by the end of the year. Furthermore, First Pacific is in need of cash simply to fund its operations for the year 2003.

The analysts said the Ayala-Campos offer may be the answer to First Pacific's mounting problems. "First Pacific can't just sit on this offer. Time isn‚t on their side with loans maturing in less than 90 days, and the Ayala-Campos group won't wait forever also," said a source close to the negotiations.

First Pacific has yet to make its position clear and definitive on the whole matter post-Gokongwei. Their plans after the termination of the MOA are still uncertain which has led to a further drop in their share price along with the share prices of PLDT and Metro Pacific.