Gov’t, Metro Pac ink deal on PTIC shares

The government has finally decided to sell its shares in Philippine Telecommunications Investment Corp. (PTIC) to Metro Pacific Asset Holdings for a total of P25.2 billion.

The parties signed the sale purchase agreement yesterday for the sale of the government’s 111,415 shares representing 46- percent stake in PTIC.

"The agreement is a demonstration of commitment by Metro Pacific to buy the government’s stake in PTIC," said Finance Secretary Margarito Teves.

However, Teves stressed that the transaction could be final and executory only after Metro Pacific is able to pay the purchase price in full.

The government and Metro Pacific also signed an escrow agreement where Metro Pacific set aside P12.6 billion in an escrow account to partially pay for the shares upon closing.  

Metro Pacific is exercising the right to match the winning bid for the PTIC shares as an assignee of PTIC, and the company has until March 8, 2007 to deliver full payment for the shares.

According to Finance Undersecretary John Sevilla, Metro Pacific has informed the government that it still needed to secure the approval of the stockholders of its parent company, First Pacific Group of Hong Kong.

According to Sevilla, First Pacific has already scheduled a shareholders’ meeting on Feb. 28, 2007 to get the approval and finally complete the transaction.

"In the event that Metro Pacific does not pay by March 8, the SPA will terminate and PTIC’s right to match will expire," Sevilla explained.

Should Metro Pacific fail, Sevilla said the government would then award the PTIC shares to Parallax Venture Fund which submitted the highest bid during the auction for the PTIC shares last Dec. 8.

The government’s 46-percent stake in PTIC is equivalent to an indirect 6.4-percent stake in telecommunications giant Philippine Long Distance Telephone Corp. (PLDT).

"We are hopeful that we will be able to complete this transaction soon so that our people can benefit right away from the additional revenues that will be raised from this asset sale," Teves said.

The government is intent on unloading its interests in PTIC regardless of which group would succeed at buying the shares.

Sevilla explained that the government had no choice but to extend the process and delay signing over the shares to Parallax which bid a total of P25.2 billion for the shares.

Sevilla said the government was not concerned about who would end up owning its shares as long as the transaction pushes through and the shares are ultimately unloaded.

When asked whether First Pacific had indicated any problems mobilizing funds to pay for the shares, Sevilla only said the group had indicated "many things."