Lopezes ready to sell BayanTel, MNTC

Except for its interests in the power and media businesses, Benpres Holdings Corp. is prepared to completely let go of its non-core assets such as BayanTel and Manila North Tollways Corp. (MNTC) to raise more capital for its balance sheet rebuilding, company officials said yesterday.

Benpres chief finance officer Angel Ong said while asset divestment has been identified as early as two years ago in line with the streamlining of the company’s operations, the process could be fasttracked with the recent financing deal for the MNTC project as well as an anticipated debt restructuring deal with creditors by the end of this year.

On Feb. 7, the financial closing and drawdown on the MNTC project worth about $261 million was achieved, raising the prospects of project completion by early 2005. MNTC is a tollway venture 20 percent owned by the Philippine National Construction Corp. (PNCC) and 67 percent by Benpres subsidiary First Philippine Infrastructure Development Corp.(FPIDC).

Aside from the MNTC stake, Benpres chairman Oscar Lopez said they are "prepared to entertain any offers in BayanTel" but added there are no proposals yet, taking into account BayanTel’s heavy debts as well as the stiff competition in the local telecommunications sector.

"Right now, there are no expressions of interest maybe until after the restructuring," he said.

Under Benpres’s balance sheet management plan being worked out with creditors, the parent company is seeking the restructuring of BayanTel’s $210 million debt, mainly arising from the convertible preferred shares issuance of which two investor groups, the Asian Infrastructure Fund of the AIG Group and the JP Morgan – Chase Manhattan, demanding for their respective payments.

Based on a shareholders agreement (SA) entered by Benpres with certain shareholders or option holders of BayanTel, the shareholders have the option to require the repurchase of their shares, under certain conditions, "upon the occurrence of certain events specified in the SA or in 2002, whichever comes first."

BayanTel has been one of the bigggest drags in Benpres’ financial health; in 2001 alone, the parent company set up a provision for the decline in the value of its investments in and advances to BayanTel – including the additional investments that may arise from its guarantees and commitments – totalling P9.9 billion.