MANILA, Philippines - Diversified conglomerate San Miguel Corp. (SMC) is not abandoning its venture into the telecommunications business through publicly-listed Liberty Telecoms Holdings Inc.
Liberty Telecoms chairman Ramon S. Ang told reporters that SMC intends to infuse fresh capital into Liberty Telecoms to pare down its existing debt.
“If needed we will put in money. This is for general requirement for them to settle their existing debt,†he stressed.
Ang, also president and chief operating officer of SMC, pointed out that details of the additional capital infusion are still being finalized.
Liberty Telecoms, a joint venture between SMC and Qatar Telecom, was incorporated in 1994. Its wholly-owned subsidiaries include wi-tribe Telecoms Inc. and Skyphone Logistics Inc.
Based on financial statement submitted to the Philippine Stock Exchange (PSE), the company’s losses declined 17.7 percent to P301.9 million in the first quarter of this year from P366.8 million in the same period last year while revenues retreated eight percent to P131.72 million from P143.03 million due to lower average revenue per unit.
The company’s cost and expenses fell to P388.01 million in the first quarter of the year from P484.62 million last year due to lower selling and maintenance expenses as well as less provisioning for impairment losses on receivables.
In the course of building up its subscriber base, the company has incurred heavy losses, resulting to a deficit of P7.83 billion as of end-March this year.
“Its major shareholders, however, fully understand that these losses should be expected, considering that its business operations are essentially still in the startup stage. The major shareholders are strongly committed to further expanding the group’s operations in accordance with its strategic plan,†the company informed the PSE.
The company’s total liabilities inched up one percent to P5.444 billion as of end-March from P5.376 billion as of end-December due to additional interest-bearing advances from its major shareholders amounting to P148.63 million to cover working capital, capital expenditures and operational expenses.
The company was placed under corporate rehabilitation by the Makati Regional Trial Court in August 2005. The lower court approved the company’s request in November 2011 to extend the implementation of its rehabilitation plan until December 2016.
wi-tribe Telecoms was granted an extension of its congressional franchise until 2037 last Sept. 21, allowing it to provide various types of domestic and international communication service to the public. It launched fourth generation (4G) broadband services using the wi-tribe brand in 2010.
On the other hand, Skyphone Logistics is tasked to acquire, sell, dispose, trade, distribute, repair, and maintain telecommunications products.