Liberty Telecoms needs P7.15-billion new capital for rehab plan

MANILA, Philippines – Liberty Telecoms Holdings Inc. (LTHI) needs around P7.15 billion in fresh capital to boost its revenues while continuously improving and expanding its service capacity.

Under its 10-year revised rehabilitation plan approved by the Makati regional trial court, LTHI will need a capital infusion of P2.04 billion to start formal commercial operation. It needs another P4.45 billion to fund its capital expenditure program, P729.56 million to pay short-term and long-term loans, and P336.16 million to pay liabilities to private creditors.

About P1.21 billion has been earmarked for payment of accrued interest and P421.13 million for working capital. 

To accelerate revenue generalization, LTHI intends to fasttrack the deployment of Libertyphone public calling offices in the third to the fifth year, and grow the number of installed units from 2,200 to around 4,021 during the same period.

LTHI also plans to install WiMAX broadband service infrastructure to market various data and voice services to more subscribers nationwide. 

The WiMAX service is expected to contribute more than 90 percent of LTHI’s projected total revenues.

“The next 10 years will see the increasing demand for this very promising service and Liberty would not want to lose the opportunity to supply the needed demand because of its capacity, existing technology and frequencies required of the service,” said LTHI.

LTHI expects to be cash positive starting the fourth year with a net profit of P445.05 million.   Revenues are likewise seen growing to P8.3 billion in the 10th year from P445 million in the fourth year.

Makati regional trial court presiding Judge Cesar Untalan said the approval of the revised rehabilitation plan is only good for four years. This means that a review of all the terms and conditions of the plan shall be made on or before Sept. 30, 2010 unless there is a good reason for the early withdrawal for the early withdrawal of the approval.

LTHI, the holding company for Liberty Broadcasting Network Inc. (LBNI) and Skyphone Logistics Inc., sought a moratorium of its debt payments in August 2005, squeezed by tight liquidity problems.

Diversifying conglomerate San Miguel Corp. earlier authorized its management to acquire approximately 32.7 percent of LTHI from existing stockholders for an estimated amount of P2.2 billion and pursue the acquisition of the balance of investment with its joint venture partner Qatar Telecom.