Sale of Lopez stake in Sky-Home on hold

The sale of half of the Lopez Group’s stake in the merged SkyCable-Home Cable, which could have easily raised at least P4 billion to trim down its debt exposure and compensate for the losses of its struggling subsidiaries, has been put on hold due to concerns being raised as to the current financial condition of the group.

Highly placed sources told The STAR that even the ongoing debt restructuring efforts involving around P3.5 billion in combined obligations of the country’s two largest cable television companies are proceeding very slowly because the creditor-banks have to take into the account the viability of the mother company, Benpres Holdings Corp.

Benpres, the publicly listed flagship of the Lopez Group has interests in communications (Bayan Telecommunications and ABS-CBN Broadcasting Corp.), utilities (Manila Electric Company and Maynilad), basic infrastructure, property development, information technology, and health care. Together with ABS-CBN, Benpres controls approximately 75 percent of Sky Vision Corp.

But Benpres is having problems of its own with many of its businesses, including Bayantel and Maynilad, losing money. Bayantel is proceeding very slowly with its debt restructuring negotiations involving mostly dollar-denominated loans used for its infrastructure build-up before the Asian financial crisis. Now, Bayantel’s loans are twice more expensive than what they were when they were acquired because of the depreciation of the peso against the dollar, from P26 to $1 to P50 to $1.

In fact, Benpres had to book P1.6 billion in losses last year of Bayantel. In 1999, it also had to book a staggering P6-billion loss incurred by Extelcom, which is 47 percent owned by BayanTel.

Officials of the two companies were expecting to have the foreign investor in by the first or second quarter of this year at the latest, but it seems that the process may take much longer, sources revealed.

The same sources said that while there is urgency, especially on the part of the Lopez group to sell part of its stake and raise money to pay off some of its debts, talks with new investors will have to wait until the debt restructuring is over.

For his part, Mediaquest president Antonio Samson told The STAR that they still have to name a chief executive for Beyond Cable, the holding company of the merged SkyCable-Home Cable.

He also revealed that while there has been a merger as far as marketing efforts and programming is concerned, the merger has not extended to the technical aspect, which will include reviewing the areas of operation to save on costs.

SkyCable, which is owned by the Lopez group through Sky Vision, and Home Cable, a subsidiary of the Philippine Long Distance Telephone Co. (PLDT) through Unilink Communications Corp. last year merged, last year merged, with the Lopez Group having 66.67 percent interest and PLDT, 33.5 percent in the holding company – Beyond Cable – that was formed to consolidate the two cable companies.

Under the agreement, the economic interest of Mediaquest and PLDT in Philippine Home Cable Holdings Inc. which is held by Unilink, and the Lopez Group’s shares in Sky Vision will be consolidated into the new holding company.