Cash-strapped Pilipino Telephone Corp. (Philtel), expects to sign a final agreement with its creditor banks this month, wth the hope of closing the company's overall restructuring program for its whopping P34.9-billion obligation by yearend.
Manuel Pangilinan, president and chief executive officer of Philippine Long Distance Telephone Co. (PLDT), parent firm of Piltel, said the banks have agreed to extend the negotiations until end of March to further thresh out details of the deal.
He stressed that the arrangement with the banks will serve as a basis for the talks with the bondholders and with Japanese supplier Marubeni where Piltel has the biggest obligation of $279 million.
"Piltel has spoken with the bondholders and I believe that the exchange offer will be guided by the Marubeni discussions and the signing of the definitive agreement with the banks," he said.
Although negotiations with Marubeni are ongoing, Pangilinan said he could not report any specific progress.
"I think they (Piltel) are focusing on the banks and the bond holders before they get into more serious discussions with Marubeni," he pointed out.
In a memorandum of understanding signed with the banks last October, 50 percent of Piltel's debts with the banks will be replaced by peso-denominated Piltel convertible preferred stock exchangeable into PLDT convertible preferred stock.
In a related development, Piltel reported yesterday a loss of P3.9 billion for 1999, although this is considerably lower than the P4.1-billion loss in 1998.
The company told the Philippine Stock Exchange that its net operating loss for the year was at P2.7 billion, of which P1.2 billion alone related to interest on its loans.
The publicly-listed cellular firm attributed the income hemmorhage to lower revenues and increased costs due largely to higher depreciation of its assets.
With increased competition from GSM providers and the growing dominance of prepaid services, Piltel's net operating revenues dropped 19 percent to P3.7 billion, from P4.6 billion a year ago.
This is despite a 21 percent increase in its subscriber base to about 457,000 at year-end, bolstered by an 82 percent growth in its prepaid card customers to 323,000 or 70 percent of its total subscribers. The prepaid scheme, however, is a lower margin service than the post-paid or billed customer base.