Is First Pacific selling its 24.4% PLDT stake?

Will Hong Kong-based First Pacific Co. Ltd. (FPC) sell its shareholdings in Philippine Long Distance Telephone Co. (PLDT) or not?

Four months before the scheduled stockholders’ meeting and election of officers of the Philippines’ largest telecommunications company, speculations already abound over whether or not FPC is indeed selling its 24.4-percent stake in PLDT.

Before any sale can push through, however, FPC will have to make sure that it has a set of directors in the PLDT board who will agree to the sale and ratify it. STAR sources said that as early as April, FPC will have to communicate to the local Securities and Exchange Commission as well as to the Hong Kong SEC whether indeed it has plans of changing its proxy nominations to the PLDT board.

This early, a renegade group at the FPC board is already waging a campaign to predispose the public to an impending sale. There have been reports that Telekom Malaysia is interested in FPC’s stake in PLDT. There are also rumors that the Gokongwei group has not abandoned its interest in PDLT.

However, PLDT president and First Pacific executive chairman Manuel V. Pangilinan still believes that a sale is not forthcoming. "But if indeed they want me out. I am willing to resign. That has been my position since last year during the Gokongwei transaction," he said. According to Pangilinan, as early as June 3 last year (a day before the agreement to sell between FPC and the Gokongwei group was signed), he already informed Salim when they met that he was prepared to resign from FPC.

STAR sources revealed that while Pangilinan and FPC controlling shareholder Anthoni Salim are already on good terms and are in fact together in strategizing for FPC’s future, there are some FPC directors who are still after Pangilinan’s neck.

Pangilinan admitted that he is disturbed that there are leaks in the FPC board. "There are only two directors who are based in Manila, me and Ed Tortoricci. Definitely, the reports are not coming from us," he said.

Reliable sources, however, have told The STAR that the leaks are coming from Hong Kong. Pangilinan emphasized that rumors about Telekom Malaysia’s interest in PDLT are not true, and that even FPC has denied there are ongoing discussions with the Malaysian company, which is a partner of Smart Communications in its regional satellite service.

The PLDT chief executive admitted though that there is continued interest in PLDT from some groups, including US-based Newbridge.

According to Pangilinan, he was, in fact, asked by the FPC management and board to prepare a regional plan on the telecommunications side of the businesss, which is in addition to a regional food strategy already being made with noodle maker and FPC subsidiary Indofood in the center of it.

"It is very clear that you cannot implement a regional telecommunications strategy without PLDT, FPC needs PLDT to do that. I believe this is an indication that there is a continuing interest in FPC retaining PLDT," he said.

Pangilinan added that there is no other business which FPC can possibly go into other than food and telco. "FPC should no longer be a conglomerate. It should focus on what it knows best which is food and telco," he emphasized.

The PLDT chief, likewise, noted that there is really no compelling reason for FPC to sell its stake in PLDT. He explained that as far as FPC’s debts are concerned, these are now down to $100 million following the agreement with the Ayala-Evergreen-Greenfield Development Corp. consortium for the latter to pay $90 million in cash in exchange for a 50.4 percent stake in Bonifacio Land Corp.

Pangilinan said that $100 million as one of the lowest debt levels of FPC since 1981, even as he stressed that the ability to reinforce this debt is there.

As to reports that FPC is preparing a set of nominees for this June’s PLDT stockholders meeting and election of directors to create a ‘more compliant board,’ he believes that directors always serve at the pleasure of the stockholders.

"But how will PLDT look if you appoint directors who will be puppets. For directors serving in public boards, it is very clear that the moment you enter the boardroom, you are representing not the interest of your principals but the interest of the company and the minority and other shareholders as well. I would never act as a puppet for anybody else," Pangilinan said as he noted that companies with strong independent board members are more likely to succeed.