Ongpin group acquires Smart stake in ETPI
Ongpin-led ISM Communications Corp. has increased its exposure in Eastern Telecommunications Phils. Inc. (ETPI) to 67.5 percent after acquiring an additional stake from Smart Communications Inc. for P100 million.
In a disclosure to the Philippine Stock Exchange, ISM said it entered into an agreement with Smart for the purchase of the latter’s 2.548 million Class A common shares in ETPI, accounting for 9.8 percent of ETPI’s outstanding capital stock.
ISM said funding for the acquisition will come from proceeds of a stock rights offering last June.
ETPI provides fixed-line services such as broadband Internet and data transmission. Previously controlled by
ISM said ETPI is key to its long-term plan, started in 2002, to shift business focus from mining ventures to operations such as pay-television, multimedia and information technology.
ISM said it is optimistic it can turn around ETPI, which has posted losses over the past five years due to a decline in demand for fixed-line phone service.
Meanwhile, ISM is raising its authorized capital stock to P3 billion from P1.2 billion to facilitate the issuance of shares to Ashmore Investment Management Ltd., one of Europe’s largest dedicated emerging markets funds with $32 billion under management.
ISM’s board approved the issuance of 16.5 billion shares to Ashmore worth $10 million (approximately P450 million) at P0.0274 each share.
With the purchase, the total shareholdings of Ashmore in ISM will increase to 31.3 percent.
ISM said proceeds from the issue will be used to fund additional investments in ETPI and “related acquisitions in the information and communication industries.”
The capital hike is subject to approval of shareholders in a special meeting yet to be set by the company.
ISM is controlled by the group of former Trade and Industry Minister Roberto Ongpin, who owns several other businesses which include Internet-based service provider PhilWeb Inc. ISM was formerly Itogon-Suyoc Mines Inc.
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