First Pacific, through wholly owned firm Metro Pacific Asset Holdings Inc., paid the government yesterday P25.2 billion for the purchase of government’s 46-percent stake in PTIC, a transaction which Finance Secretary Gary Teves described as the third biggest privatization done by the Philippine government after Petron and Fort Bonifacio.
The government’s 46-percent stake in PTIC is equivalent to an indirect 6.4-percent stake in telecommunications giant Philippine Long Distance Telephone Co. (PLDT). First Pacific prior to the acquisition of government’s stake owned 54 percent of PTIC.
Metro Pacific, as an assignee of PTIC, exercised the right to match the P25.2 billion bid posted by Singaporean investment firm Parallax Venture Fund XXVII during the auction held last Dec. 8.
Shareholders of First Pacific approved the acquisition in a special stockholders’ meeting held in Hong Kong yesterday morning. The official turnover of the P25.2 billion check to the finance department was made at lunch and, according to Pangilinan, the transfer of the shares to Metro Pacific in the books of PTIC would hopefully be accomplished by yesterday afternoon.
Originally, First Pacific was supposed to team up with NTT DoCoMo which was supposed to put up half of the amount needed for the purchase. But DoCoMo officials told The STAR earlier that "there was a disagreement as to the price," forcing Japan’s biggest mobile phone company to back out of the consortium.
However, First Pacific managing director and CEO Manuel Pangilinan said they have asked for a meeting with the Japanese company to find out how they can arrive at an agreement.
But whether First Pacific will sell to DoCoMo half of the 111,415 shares acquired from government or less remains to be seen. "We still have to determine our equity position in PLDT to ensure that we maintain a certain threshold of ownership, especially after the conversion of certain convertible preferreds into common. Right now, we are comfortable with our ownership of 29 percent," Pangilinan explained.
Pangilinan, chairman of the PLDT group, said the P25.2 billion paid to government yesterday was sourced partly from internal funds of First Pacific and partly from third party borrowings.
He said their decision to acquire government’s stake in PTIC is largely due to the fact that it is a good investment and also to maintain their equity position in PLDT. "We are here for the long run," Pangilinan emphasized.
Following two significant investments made by First Pacific, namely the additional PTIC shares and a majority stake in Maynilad Water Services worth $447 million, he noted that it might be wise for First Pacific to pause for a while before considering other investments. "But definitely we are open to other opportunities in infrastructure, telecommunications, and other areas of investment both in the Philippines and elsewhere in the region," he said.
One of the investment opportunities being looked at is the acquisition of government’s stake in RPN 9 and IBC 13 although Teves said it might take a while before they are finally sold, due to some unresolved issues.
The finance secretary said the P25.2 billion received from First Pacific will be booked in the accounts of government for the month of February. Government hopes to raise P27 to P29 billion from the privatization of certain assets, including the PTIC shares.
"We have not yet included government’s shares in Meralco and San Miguel Corp.because there are still matters that need to be resolved," Teves noted. The secretary met with PCGG chairman Camilo Sabio yesterday to discuss the various issues affecting the disposition of the Meralco stake.