ISM Communications acquires additional 10.2% stake in ETPI
ISM Communications Corp. has acquired an additional 10.2-percent stake in Eastern Telecommunications Philippines Inc. (ETPI) for P104.09 million.
In a disclosure to the Philippine Stock Exchange, ISM said it purchased 2.652 million shares held by the government in ETPI, raising its stake in the telecommunications company to 77.7 percent.
The purchase follows the acquisition of Smart Communication Co.’s 2.548 million Class A common shares of ETPI in October last year in a deal valued at P100 million.
Funding for the acquisition will come from proceeds of a stock rights offering held in June 2007.
ETPI provides fixed-line services such as broadband Internet and data transmission. Previously controlled by Cable & Wireless Plc., ETPI is one of the oldest telecommunications companies in the
ISM views ETPI as key to its long-term plan, started in 2002, to shift its business focus to operations such as pay-television, multimedia and information technology from mining.
ISM is optimistic it can turn around ETPI , which has posted losses over the past five years because of a decline in demand for fixed-line phone service.
The company increased its capitalization 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.
With the purchase, Ashmore’s stake in ISM increased to 31.3 percent.
ISM is controlled by the group of former Trade and Industry Ministerr 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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