First Pacific to raise $500M via debt or equity to fund reg’l expansion

Hong Kong-based First Pacific Co. Ltd. (FPC) intends to raise about $500 million from either debt or equity or both to finance a regional expansion of its telecommunications and food interests.

The regional expansion will use the Philippine Long Distance Telephone Co. (PLDT)-Smart Communications and Indonesia-based Indofood as core assets. First Pacific owns a controlling 24.4-percent stake in PLDT and has revealed plans that it may increase its interest in the future.

FPC managing director and CEO Manuel V. Pangilinan said the amount can still change depending on the targets. It was earlier reported that the conglomerate is in discussions with cellular companies Orange of Thailand and Excelcominda of Indonesia for possible investments. FPC is also looking at investing in Malaysia.

While Pangilinan would neither confirm nor deny the talks with the two companies, he nevertheless revealed that FPC is indeed in talks with a number of companies in the region and is doing a "cellular assets search" in the region.

"Basically, we at First Pacific want to invest in companies similar to PLDT, principally the cellular side of the business, and hopefully replicate Smart’s success in other countries," he explained.

He expressed confidence that the plan to replicate Smart’s success story in other countries in the region will succeed, citing for instance Indonesia’s similarity to the Philippines in terms of economic profile and consumer habits.

Pangilinan, chairman of both PLDT and Smart, said that right now, the planned acquisitions and investments within the region will be undertaken by FPC. "But First Pacific will talk to PLDT and Smart if they want to participate and how they can participate in these investments. PLDT has got to take its own view," he stressed.

PLDT in particular is looking at the possibility of exporting products and services, particularly those of Smart, but according to Pangilinan, more money can be made if FPC owns an interest in the buying entity.

Pangilinan said FPC wants to own majority, if not controlling, stake in the companies that it will invest in.

Aside from raising funds from debt and equity, the FPC chief executive said the company still has adequate cash resources from the recent sale of its stake in Indian cellular company Escotel.