Tonyboy, Manny work to get 30% of PLDT

A consortium led by Philippine Long Distance Telephone Co. (PLDT) chairman Antonio O. Cojuangco and president and chief executive officer Manuel V. Pangilinan is trying to accumulate at least a 30-percent stake in PLDT from various sources, enough to wrest control of the company from First Pacific Company Ltd., currently the controlling shareholder.

STAR sources said that by wresting control, Cojuangco’s camp hopes to stop the sale by First Pacific of two-thirds of its stake in PLDT to the Gokongwei group. The sale has been opposed by PLDT management and its board of directors.

It was learned that Cojuangco is serious about exercising his right of first refusal over First Pacific’s interest in Philippine Telecommunications Investment Corp. (PTIC), which owns 15.4 percent of PLDT. By exercising this right, Cojuangco will have full control of PTIC, a company which the Cojuangco family used to control.

First Pacific, through Metro Pacific Assets Holdings Inc. and Larouge B.V., has a 53.9-percent interest in PTIC. The rest is owned by Cojuangco’s family and the right of first refusal in case First Pacific sells its holdings in PTIC is contained in a shareholders’ agreement between the two.

Since 15.4 percent of the 24.4-percent interest of First Pacific in PLDT is held by the former through PTIC, the Hong Kong-based conglomerate’s holdings in PLDT will be reduced to nine percent if Cojuangco exercises his right.

Aside from PTIC, there are other PLDT shareholders holding significant blocks of shares who may be willing to sell their stake to Cojuangco’s group. These include Ambassador Alfonso Yuchengco, who has a six-percent interest in PLDT, the Capital Group which has around six to eight percent. US fund management giant Capital Research and Management Co. is said to be the second single-biggest foreign shareholder of PLDT, next to NTT of Japan.

"When you have the money, it will not be hard to buy. And definitely Mr. Cojuangco’s group has the money," the source said.

And if NTT Communications Corp. of Japan agrees to exercise its right of first refusal over First Pacific’s 24.4-percent stake in PLDT and to assign it to Cojuangco’s camp, the latter could easily get a majority interest in the country’s biggest telecommunications company.

"It will be good to have an alliance with NTT. But if there will be none, then a 30-percent stake will be good enough, definitely better than First Pacific’s 24.4 percent," the source added.

Up to now, NTT has yet to signify whether it will exercise or waive its right of first refusal over First Pacific’s stake in case the latter sells or transfers its interest.

NTT’s waiver of this right is a precondition to the completion of a sale transaction between First Pacific and a still-to be-created joint venture company to be participated in by the Gokongwei group that will have a two-thirds stake in the new company and First Pacific which will retain one-third.

First Pacific and the Gokongwei group, according to the memorandum of agreement signed last June 4 between the two parties, expect the transaction to be completed before Sept. 30 this year.

Another conditionality to the sale is the conduct by the Gokongwei group of due diligence on PLDT and Bonifacio Land Corp., 50.4 percent of which is also being sold by First Pacific.

According to sources, Cojuangco is willing to use his own money if needed for PTIC. It will be recalled that when Cojuangco’s family sold its shares in PLDT, they were sold for around P1,400 per share, compared to the current market price of P325 per share as of yesterday’s trading. "If he decides to once again control PLDT, it’s because it is a good business decision that makes sense, nothing more," one source emphasized.

But Cojuangco may not have to use his personal funds after all. The STAR learned that the group is in talks with several parties, including a fund management company based in Denver, that wants to put in money into the venture.

As for Bonifacio Land, Cojuangco has tied up with Jose Y. Campos of United Laboratories and Greenfields Development Corp. to raise $105 million needed to assume the loan extended by First Pacific subsidiary Larouge B.V. that is secured by 50.4 percent of Bonifacio Land.

The amount will be used by Metro Pacific Corp., owner of Bonifacio Land, to repay Larouge. Cojuangco’s group will then control Bonifacio Land.

Bonifacio Land is considered the crown jewel of Metro Pacific, First Pacific’s flagship company in the Philippines, and is the owner and developer of the Fort Bonifacio property.