This as the Bank of New York, acting upon the instructions of some secured bondholders of BayanTel, filed a petition for rehabilitation with the RTC.
The bondholders included Avenue Asia Investments LP., Avenue Asia International, Ltd., Avenue Asia Special Situations Fund II, L.P., Avenue Asia Capital Partners, L.P., and Van Eck Global Opportunity Masterfund, Ltd.
The court order, among other matters, stayed the enforcement of all claims and actions against BayanTel.
The court also appointed Conchita Manabat a former president of the Financial Executives Institute of the Phils. (Finex), as rehabilitation receiver. Her task is to draft a feasible rehabilitation plan to ensure the orderly settlement of BayanTel’s debt and the improvement of the firm’s financial condition.
BayanTel’s parent company, Benpres Holdings Corp., said it has yet to secure a copy of the petition and of the rehabilitation plan.
BayanTel chief financial officer Gary Olivar explained that the stay order from the court does not cover payments and transactions made in the normal course of business such as settlement of administrative expenses, including salaries and payments for goods and supplies.
However, Olivar reassured investors, clients, employees and other stakeholders that it is "business as usual" for the telecoms firm.
Angel Ong, Benpres chief operating officer said that "BayanTel’s rehab plan process has no impact on Benpres’ own debt restructuring."
Ong emphasized that Benpres has assumed no cash dividend coming from BayanTel in its Balance Sheet Management Plan.
BayanTel has suffered recurring losses resulting in an unaudited consolidated accumulated deficit of P21 billion and P19.1 billion as of Dec. 2002 and 2001, respectively. This has affected its ability to service its maturing obligations on a timely basis.
The ability of BayanTel to continue operating in the normal course depends on the acceptance by its creditors of the restructuring plan and the success of its operations.
BayanTel expects to have a substantial restructuring agreement with its creditors in place by the end of the year.
The company earlier said majority of its creditors have thrown full support to the revised term sheet drafted by its financial advisor.
The revised restructuring plan was made by BayanTel last December wherein it offered 10 percent of the company to unsecured creditors through a debt-to-equity conversion scheme. BayanTel valued the 10-percent shares at $150 million.
BayanTel also asked for a "three-fourths" reduction on the interest rates on the loans, but only "temporarily" or on the first four quarterly amortizations.
BayanTel is restructuring some $477 million in obligations. It was in early 2000 when BayanTel started talks with creditor banks and bondholders to restructure debts. Of the total, $277 million is owed to banks and $200 million to bondholders.
About five percent or $26 million of the bank loans and all the bonds are unsecured.