MANILA, Philippines - London-based Fitch Ratings sees the ongoing takeover of cash-strapped Bayan Telecommunications Inc. by Ayala-led Globe Telecom Inc. as credit positive amid strong competition in the telecommunications industry.
This developed as Fitch affirmed Globe’s long-term foreign- and local-currency issuer default ratings (IDRs) as well as its senior unsecured national long-term rating at ‘BBB-‘ and its national long-term rating ‘AAA(PHL).’
Fitch said the planned takeover of Bayantel that controls 10MHz spectrum on the 1800MHz band and an additional 10MHz on the 2100MHz band currently subject to a permanent court injunction would help improve the network of Globe.
“Additional spectrum should aid Globe towards improved network quality and enable further data growth. Globe is in the process of converting significant portions of its holdings of Bayantel’s debt into equity, with a view to own a majority stake in Bayantel,†Fitch said.
The transaction would allow Globe to acquire a 56.6 percent interest in the cash-strapped Bayantel through a debt-to-equity transaction. Once approved, Globe and Bayantel would be able to utilize each other’s property, services, infrastructure including radio frequencies.
Fitch said the ratings and stable outlook reflect Globe’s status as the second-largest telecom operator.