MANILA, Philippines - Ongpin-led ISM Communications Corp. has decided to complete its divestment in the telecommunications industry to enable it to channel its resources to support its recent investment in the Philippine Bank of Communications (PBCom).
ISM officials said the recent sale of its shares in Eastern Telecommunications Phils. Inc. (ETPI) to the San Miguel Corp. (SMC) Group will allow ISM to now focus on the banking business.
ISM sold its remaining 37.7 percent stake in ETPI, which consisted of a total of 9.8 million Class A common shares of ETPI for a total consideration of P1.51 billion. The consideration is based on the existing business of ETPI, ISM officials explained.
Both ISM chairman and CEO Roberto Ongpin and president Eric Recto are members of the board of directors of SMC.
The SMC Group now owns 77.7 percent of ETPI after ISM entered into a share purchase agreement for the sale of its remaining 37.7-percent stake in ETPI to San Miguel Equity Securities Inc., a wholly-owned subsidiary of SMC.
Vega Telecom Inc., the telecommunications unit of SMC, bought ISM’s 40-percent stake in ETPI in December 2010. The remaining 22- percent stake in ETPI is held by the Africa family.
With the sale of its entire stake in ETPI, ISM is completely out of the telecommunications business.
The acquisition of ETPI will enable the SMC Group to offer a full range of telecommunications services. ETPI provides data and Internet leased circuits, full-service telephony and managed telecom services.
ISM is also in talks for the possible sale of its 32.5-percent interest in Acentic, an international provider of information technology services to hotels and hospitals, was being sold to interested buyers. The book value of ISM’s stake in Acentic is estimated at P660 million.
Host Union International Ltd., a Hong Kong special purpose vehicle jointly owned by PhilWeb and ISM, acquired a 65-percent stake in Acentic in January last year.
ISM earlier acquired 97 percent of PBCom for P4.681 billion and is moving into banking while easing its exposure to the telecom and IT sectors by divesting its stakes in ETPI and Accentic GmbH.
The STAR earlier reported that Ongpin is consolidating his telecommunications interests in SMC, with the sale of two of the telcos that he controls to SMC.
Aside from ETPI, Ongpin also controls Express Telecommunications (Extelcom) through Trans-digital Excel, the former creditor turned majority shareholder of Extelcom.
Both ETPI and Extelcom are either directly or indirectly controlled by Ongpin, either through his personal investments or as representative in the Philippines of international fund manager Ashmore.
Extelcom has been offered to SMC, which now owns a stake in Liberty Telecom. With Liberty’s assets limited to wireless broadband frequencies, ownership of Extelcom and ETPI will give SMC not a only a cellular license but also make it a full range telco services provider.