Digitel may defer $210-M bond float

Plans by the Gokongwei-owned Digital Telecommunications Phils. Inc. (Digitel) to raise funds for its planned cellular business via a bond float may have to wait for better times.

Digitel senior vice president William Pamintuan said that although the plan to float $210-million worth of bonds has not been set aside yet, company officials are studying other options which he declined to reveal.

He noted that due to weak market conditions, several companies, including the Philippine Long Distance Telephone Co. which will no longer push through with its own bond flotation are postponing plans to raise funds publicly. PLDT junked its plan following the terrorist attacks on the United States, where the firm is listed.

According to Pamintuan, they will have a soft launch of their cellular service this December but the commercial launch will be done sometime in April or May next year.

Digitel is seeking two congressional franchises for its planned mobile and data operations due to a requirement set by its foreign partners, including Telia AB of Sweden which has a 10 percent stake in the company.

Hearings are ongoing as far as the franchise application is concerned, but according to Pamintuan, this will not affect Digitel’s timetable since it already has a PA from the NTC.

Aside from proceeds of the $210-million bond float which was planned before yearend, Digitel has programmed an additional $290 million sourced from internally generated funds, suppliers credit, and additional equity from existing partners, to finance the CMTS undertaking, Pamintuan said. A total of $500 million has been allocated for the new business for the next five years.

Digitel is currently in talks with two foreign firms (one North American and one European) on a possible strategic partnership in the CMTS business.