First Pac solidifies hold on PLDT

Hong Kong-based First Pacific Co. has solidified its control over telecommunications giant Philippine Long Distance Telephone Co. (PLDT) after a cooperation agreement with the NTT of Japan that will require First Pacific and NTT to vote as a group took effect yesterday.

NTT Communications Corp. announced yesterday that it has completed its sale of around 12.6 million PLDT common shares to sister company NTT DoCoMo for a total consideration of Y52.1 billion ($440 million). Said shares represent seven percent of PLDT’s outstanding common stock. This sale transaction leaves NTT Com with a seven percent equity holding in PLDT.

PLDT, First Pacific and some of its affiliates, NTT Com and DoCoMo have signed a cooperation agreement last Jan. 31. With the completion of the transfer by NTT Com of half of its PLDT common shareholdings to DoCoMo, the cooperation agreement becomes effective.

One provision of the agreement requires all parties to vote as a block. Company sources said this will effectively ward off attempts by other groups to secure control of PLDT.

It will be recalled that the Supreme Court earlier ordered the reconveyance to the government of certain assets owned by the family of businessman Antonio "Tonyboy" Cojuangco consisting of 111,415 shares of the Philippine Telecommunications Investment Corp. (PTIC) registered in the name of Prime Holdings Inc. (PHI) owned by the Cojuangcos.

PTIC, 46 percent of which is owned by PHI and the rest by First Pacific and Metro Pacific Holdings, currently has a 14-percent stake in PLDT. PHI therefore effectively owns seven percent of PLDT and the Presidential Commission on Good Government (PCGG) plans to immediately dispose of these shares to the highest bidder.

PLDT chairman Manuel V. Pangilinan earlier told The STAR that First Pacific, of which he is the managing director, is definitely interested in acquiring PHI’s stake in PTIC since it would make sense for the current majority owners of PTIC to own the rest of the company. But he also admits that the First Pacific group does not have a right of first refusal over the PHI stake.

Also under the cooperation agreement, a 20-percent equity ceiling was set for the NTT group which currently owns 14 percent of PLDT. There are reports that DoCoMo will accumulate the remaining six percent from the market to complete the 20 percent.

With the First Pacific group already owning around 25 percent of PLDT and the NTT group working to own a total of 20 percent, securing NTT’s cooperation in terms of voting will secure for the group a controlling vote of 45 percent.

NTT DoComo which is Japan’s leading mobile phone company and NTT Comm which is Japan‚s landline leader are both owned by NTT Corp. which is one of the world’s largest telecommunications companies.

Japan’s leading mobile phone company NTT DoCoMo has bought half of its sister company NTT Communications‚ 14 percent holdings in Philippine Long Distance Telephone Co. (PLDT) for $440 million (Y52.1 million), even as DoCoMo revealed plans of increasing its stakeholdings in PLDT.

Docomo, the world’s leading mobile communications company, agreed to acquire 12.63 million common shares of PLDT, representing seven percent of PLDT‚s total outstanding common shares, from NTT Communications (NTT Com), a subsidiary of Nippon Telegraph and Telephone (NTT) Corp. which is one of the world’s largest telecommunications companies.

DoCoMo’s acquisition will result in one of the current PLDT directors nominated by NTT Com being replaced by a nominee of DoCoMo. The Japanese company has said that it may consider increasing its investment in PLDT provided a suitable opportunity arises.