In a disclosure with the Philippine Stock Exchange, ISM said it will issue 6.816 billion new shares which will come from its planned increase in capital stock. In exchange, ISM will receive 4.6 million class A shares of ETPI, accounting for 17.7 percent of ETPI’s outstanding capital.
In view of this, the PSE issued a temporary trading halt on ISM shares which will be lifted tomorrow.
ETPI, previously controlled by Cable & Wireless Plc., is one of the oldest telecommunications companies in the Philippines. Its main sources of revenues are the carrier, data, Internet and voice businesses.
ISM president Eric Recto said this agreement marks the beginning of ISM’s transformation into a telecommunications company, which had been on hold pending the completion of the acquisition of assets.
Recto said there are other related opportunities which ISM is currently working on and shall be disclosed when these are completed.
ETPI is subject of a dispute between its management and Australian investors after the latter’s representatives were removed from the board of the telecommunications firm.
AGN Philippines Inc., which owns 40 percent of Eastern Telecommunications Philipppines Inc. has threatened to file criminal charges against the representatives of the Presidential Commission on Good Government who voted to replace Dr. Roger Buckeride from the position of chairman in ETPI.
According to AGN, Ongpin’s group has been trying to acquire ETPI since last year but its efforts had always been blocked by the group of Buckeride. ISM even filed a case in June 24, 2004 with branch 57 of the Makati Regional Trial Court to compel ETPI to open its books to ISM for a due diligence study.