The bank earlier filed the petition upon the instructions of unsecured bondholders of Bayantel such as Avenue Asia Investment L.P.; Avenue Asia International Ltd.; Avenue Asia Special Situations Fund II L.P.; Avenue Asia Capital Partners L.P.; and Van Eck Global Opportunity Masterfund Ltd.
A local trial court has appointed a rehabilitation receiver for the company in the person of Conchita Manabat, former president of the Financial Executives Institute of the Philippines.
BayanTel chief finance officer Gary Olivar told The STAR that the first hearing on the petition will be held late this month.
He said that it was unfortunate that the petition came at a time when there were no other major items left on the table as far as BayanTel’s negotiations with its creditors for a restructuring agreement involving $477 million in debts.
The court’s stay order also prevented the enforcement of all claims and actions against BayanTel, but this does not cover payments and transactions in the normal course of business.
According to Olivar, BayanTel as a going concern will continue as before. "There are no changes as far as operating plans are concerned. We are still focused on stabilizing our voice business and expanding on our data concerns," he said.
He explained that they are not prohibited by the stay order from paying for capital expenditures, although major capex programs may require that the receiver be involved.
He said the matter is primarily an issue between two groups of creditors, which he believes was a result of BayanTel having stopped payment of interests to the bondholders since the third quarter of 2000.
Earlier, BayanTel president and chief executive officer Eugenio L. Lopez III said the company is expected to return to profitability once it completes the restructuring of the $477-million in debts which were incurred in the course of expanding its telephone business infrastructure.
Of the total debt, $200 million are in the form of bonds while the balance represents loans from banks.
Company officials explain that while BayanTel is EBITDA (earnings before interest, taxes, depreciation, and amortization)- positive, the huge debt burden has been weighing down on the telecom firm. The debts were incurred at a time when the peso-dollar exchange rate was at P26:$1.
BayanTel ranks third in the fixed line business, next to the Philippine Long Distance Telephone Co. (PLDT) and Digital Telecommunications (Digitel). It also has a license to operate a nationwide cellular mobile telephone system (CMTS).