Liberty Telecoms widens loss to P192.46 million in first quarter

MANILA, Philippines - Liberty Telecoms Holdings Inc. (LTHI) posted a net loss of P192.46 million in the first quarter of 2010, higher than the P99.4-million loss suffered in the same period last year, mainly due to the launch of the group’s broadband service.

LTHI is 42.13 percent owned by Vega Holdings, a wholly- owned subsidiary of San Miguel Corp., and 24.12 percent by QTel West Bay Holding SPC, wholly owned by wi-tribe Asia Ltd. which is, in turn, a wholly-owned subsidiary of Qatar Telecom. Other major shareholders include White Dawn Solution Holdings with 17 percent and wi-tribe Asia Ltd. with 9.9 percent.

The company said last February, Liberty Broadcasting Network Inc. (LBNI), the operating subsidiary of the parent company, soft-launched its Wireless Interoperability for Microwave

Access (WiMAX) services under the brandname wi-tribe, resulting in almost all expenses of the Liberty Group going up during the first quarter compared to the same period last year. The group is targeting 70,000 subscribers by the end of the year.

It reported that LBNI continued to build the organization in 2010, which resulted in a 212.62-percent increase in salaries, wages and benefits, from P13.59 million in March 2009 to P42.47 million in March 2010.

Expenses for rental and utilities increased on account of power restoration in most of the sites owned and leased by LBNI and rentals of sites (hub and access sites) for the WiMAX services, it added.

The company also reported that interest increased 409.1 percent, from P1.53 million in March 2009 to P7.81 million in March 2010, due to booking of the difference between the total amount paid to creditor RCBC as full and final settlement of their dues, as per the revised rehabilitation plan.

On March 12, 2010, after receiving payment from LBNI, RCBC agreed to the discharge of Liberty Telecoms, its guarantors and sureties, from their obligations to RCBC.

In 2009, LTHI posted a net loss of P557 million as against a P502.5-million loss in the previous year, although company officials expect an improved financial picture this year as the company began the rollout of its telecommunications network and commercially launched its broadband service.

In April 2005, the management of the Liberty Group, which includes Skyphone Logistics and LBNI, decided to suspend business operations due to lack of capital required to operate and continue the business. In August 2005, the group filed with the Regional Trial Court of Makati a petition for corporate rehabilitation after which on Dec. 12, 2006, the court approved a revised rehabilitation plan.

RCBC filed a motion to terminate the rehabilitation proceedings but the motion was dismissed by the rehabilitation court, which order was subsequently affirmed by the Court of Appeals on March 24, 2010.

On Dec. 2008, LTHI issued 175 million and 300.8 million preferred shares respectively to wi-tribe Asia and White Dawn for the conversion of the group’s liabilities totaling P1.5 billion that were acquired by the new shareholder groups. In 2009, deposit for future subscriptions amounting to P2.1 billion was received from the shareholders. An additional deposit of P600 million was received in January 2010.