Piltel inks MOU with Marubeni for loan restructuring

The Pilipino Telephone Corp. (Piltel), a subsidiary of the Philippine Long Distance Telephone Co. (PLDT), announced Monday that it has signed a memorandum of understanding (MOU) with Marubeni Corp. (Marubeni) of Japan that covers the restructuring of Piltel’s financial obligations to Marubeni. Definitive agreements are expected to be signed before the end of the year.

The signing of the MOU by Napoleon Nazareno, Piltel president and chief executive officer, Kazuhiro Owaki, corporate vice president, director and chief operating officer of Marubeni’s IT Business Division; and Manuel V. Pangilinan, PLDT president and chief executive officer, marks another important milestone in Piltel’s overall debt rehabilitation plan.

Piltel signed a master restructuring agreement (MRA) with some of its creditor banks in June, 2000. Marubeni has now agreed to enter into an agreement with Piltel broadly within the same framework and parameters set forth in the MRA.

Piltel’s obligations to Marubeni arise from a build-transfer agreement in August 1996, whereby Marubeni was engaged to design, finance, engineer, construct, install, test and commission a telecommunication network and facilities in Mindanao.

Piltel is also preparing an exchange offer to the holders of its convertible bonds which also provides similar economic benefits to those offered to the bank creditors and Marubeni. This offer will be made formally before the end of the year.

After the signing ceremony, Pangilinan said: "I am delighted that we have been able to take another important step in the restructuring process as we continue to serve Piltel’s valued customers."

"We are committed to the growth of our cellular business. Piltel alone has more than 600,000 customers, including 300,000 on the GSM Talk N Text service launched just six months ago."

"Our capital expenditure on our cellular operations, including those of our subsidiary Smart Communications Inc., will be around P18 billion this year and could amount to another P18 billion again in 2001 – and that is on top of at least P10 billion that PLDT plans to invest in its own fixed line network infrastructure," Pangilinan added.