Liberty Telecoms increases capital to P6.8 billion

MANILA, Philippines - Liberty Telecoms Holdings Inc. (LTHI) is raising its authorized capital stock from P2 billion to P6.8 billion in a bid to jumpstart its renewed operations.

In a disclosure to the Philippine Stock Exchange yesterday, LTHI said Vega Telecom Inc., a wholly-owned unit of diversified conglomerate San Miguel Corp.; Wi-Tribe Asia Ltd. and White Dawn Solution Holdings Inc. are subscribing to a total of 1.2 billion preferred shares.

LTHI said its board approved subscriptions to the increase at P3 per share. Of the total shares, 587.95 million has been subscribed by Vega Telecom, 367.66 million by Wi-Tribe Asia, and 244.39 million by White Dawn.

LTHI’s stocks closed five centavos lower yesterday at P2.65 from Friday’s close of P2.70 each share.

San Miguel, through Vega Telecom, has acquired 32.7 percent of LTHI for P1.88 billion. The move is part of the conglomerate’s plan to acquire up to 49 percent of the inactive telecom company.

However, San Miguel’s purchase of the remaining 16.3 percent of LTHI is still subject to discussion with its joint venture partner, Qatar Telecom which, in turn, owns 27 percent of LTHI through subsidiary Wi-Tribe.

Based on its 10-year amended rehabilitation plan, LTHI needs around P7.15 billion in fresh capital to boost its revenues and service capacity. Of the total, P2.04 billion will be used to resume formal commercial operation while P4.45 billion will be used to cover its capital expenditure program. 

Around P729.56 million will go to payment of short-term and long-term loans while P336.16 million will be used to pay down liabilities to private creditors.

To accelerate revenue generalization, LTHI intends to fasttrack the deployment of Liberty phone public calling offices and increase the number of installed units from 2,200 by the third year to around 4,021 by the fifth year.

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 to LTHI’s projected total revenues.

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

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