MANILA, Philippines - Ayala-led Globe Telecom Inc. is looking at completing the take-over of cash-strapped Bayan Telecommunications Inc. of the Lopez Group within the year paving the way for an early exit from the ongoing rehabilitation program.
Alberto de Larrazabal, chief financial officer of Globe, said in an interview with reporters that the telecom provider is set to complete the conversion of the debt it acquired from the debt holders of BayanTel into equity and at the same time finish the negotiations with the Lopez Group within the year.
De Larrazabal said the company is currently talking with the Lopez Group that control close to 97 percent of BayanTel for the complete takeover of the ailing telecom provider.
“The intent or desire is to end up with a majority stake. The intent is to eventually end up with controlling interest,†he added.
The company, according to him, is still finalizing the conversion of the debt of Bayantel and Radio Communications of the Philippines Inc. (RCPI) it acquired with a face value of over $400 million but was only acquired at a discounted price of $130 million.
Globe acquired 96.5 percent of the total bondholders of BayanTel.
The Globe executive pointed out that the company plans to ask the rehabilitation court for an amendment of the rehab plan to ensure continued service to BayanTel’s fixed line and broadband customers.
De Larrazabal said the company hopes to file an amended rehabilitation plan before the rehabilitation court within the next few weeks to ensure the long-term viability of BayanTel.
He added that the company is looking at an immediate exit from the rehabilitation plan as the original deadline of the rehabilitation set by the Lopez Group is 2023.
BayanTel has reportedly settled a total of P8.19 billion in total debt since it filed for corporate rehabilitation in 2004. In the first nine months of last year, the company paid P908.3 million worth of debt.
The debt-ridden telco provider had been subject to court-supervised rehabilitation proceedings since 2003 and intends to pay its $325 million outstanding debt within 2023.
“We have said that we intend to put BayanTel in a more solid footing and that would entail conversion of debt into equity so that the level of debt that is outstanding is something that is commensurate to capacity to pay,†he said.
The official said the acquisition would entail the approval from the rehabilitation court as well as the state-run National Telecommunications Commission (NTC) since it would involve the change in ownership.