APC resumes talks for sale of Philcom as Fiber withdraws bid

APC Group, controlled by leisure and gaming firm Belle Corp., has revived talks with three groups of investors for the sale of its telecommunications unit Philippine Global Communications Inc. (Philcom) following the withdrawal of interest by Fiber Telecom.

During the company’s annual meeting Thursday, APC president Willy Ocier said they are still bent on putting Philcom on the auction block even as Fiber Telecom has withdrawn its offer to purchase the debt-laden telecommunications firm.

Fiber Telecom had offered to assume the P5.3-billion liabilities of Philcom.

"Fiber Telecom, the would-be buyer, is no longer in the picture but our decision to sell Philcom is still in the works. We’re still pursuing the sale to stop the bleeding and reverse our losses. We’ve been losing heavily because of financing charges and depreciation costs brought about by Philcom’s operations," Ocier said.

Ocier said he is confident the sale of Philcom would be consumated over the next six months. However, he declined to identify the prospective investors but hinted two are local groups while one is a foreign company.

"We hope to complete talks within six months. The buyer would assume Philcom’s debt," Ocier said.

Ocier said the accumulated losses of Philcom and APC amount to almost P7 billion.

The sale of Philcom would allow APC to focus on more promising growth businesses such as oil and gas exploration and mining. Philcom has been incurring losses which have accumulated to P6.85 billion since 1998. These losses have resulted in negative stockholders’ equity for APC.

Last year, Philcom widened its net loss to P646.1 million from P635.9 million in 2004 on higher expenses.

For the first quarter this year, APC incurred a net loss of P21.7 million, significantly lower than the previous level’s P41.8 million. The improvement was mainly due to lower loss of Philcom arising from higher revenues.

As of end-March this year, APC had a capital deficiency of P8.72 billion.

Other measures taken by the company to improve its financial standing include the phasing out of its petroleum trading operations and the sale of the assets and contracts of its security service companies.

APC earlier formed three subsidiaries to engage in oil and gas exploration and mineral resources development, namely Aragorn Power & Energy Corp., Aragorn Coal Resources, and APC Mining Corp.