Stradcom seeks government nod for P1.2-B IT bonds

A local company whose shareholders include the Philippine Long Distance Telephone Co. subsidiary ePLDT and the International Finance Corp. (IFC) is seeking government approval to float P1.2-billion worth of information technology (IT) bonds.

Stradcom Corp., wholly owned by Stradcom International Holdings (SIHI), plans to use the proceeds from the issue of the IT bonds to pay its loans with Unisys and PBCom and provide financing for components of a P3.4-billion IT infrastructure project for the Land Transportation Office (LTO) under a build-own-operate arrangement.

The IT bonds, due on June 4, 2007, will be offered for sale to the local public. The offer price will be 100 percent of the face value of the bonds. Offer period will commence May 27, 2002 and end on May 31, 2002.

Documents submitted to the Securities and Exchange Commission showed that the IT bonds will be a secured debt of Stradcom. By June 30, 2002, the company’s debts will amount to P2.07 billion (including the bond offer), of which P2.038 billion would be secured debt.

Stradcom was organized by principal shareholders Strategic Alliance and Dev’t. Corp. (Stradec) and Comfac Corp. as the project company tasked to implement the construction and operation of an IT infrastructure project for LTO.

SIHI is indirectly owned by Stradec and Comfac through United Information Technologies Inc. to the extent of 37.5 percent and 25 percent, respectively. ePLDT, Inc., a wholly owned subsidiary of PLDT serving as the latter’s primary corporate vehicle for Internet, electronic commerce, and multi-media businesses, owns 22.5 percent of SIHI while IFC, a multilateral financing institution, has 15 percent.

STAR sources revealed that Corporate Access, which handled the small-denominated Treasury bills offering, will be the financial adviser for the Stradcom bond float while a syndicate is still being formed to be the underwriters.

The LTO-IT project covers the development of a system integrated IT solution infrastructure that will interconnect at least 247 LTO offices nationwide in a wide area network, integrate its critical business processes, and enable online transaction processing.

At the core of the project is a data warehouse engine presently capable of storing information on around 20 million records. At full automation, the project is capable of processing 12 million transactions.

The concession period during which Stradcom will operate the facilities is 10 years. During such time, the company will own the IT infrastructure and provide services using its IT facilities. At the end of the term, Stradcom has to withdraw the IT facilities from the LTO premises.

In the meantime, Stradcom has been collecting fees for completed sites and modules as compensation for actual use by the LTO of the IT facilities. The fees include P120 for every motor vehicle registration transaction and P48 for each drivers’ license and permit transaction, both VAT exclusive.

For the first three months of 2002, Stradcom has generated daily revenues of about P650,000 exclusively from motor vehicle registrations and drivers’ licenses. Aside from these, the company also expects additional revenues from the law enforcement and traffic adjudication system (LETAS), and the manufacturers, assemblers, importers, and dealers reporting system (MAIDRS), and eventually, from drug testing connectivity and insurance connectivity.