Eastern Telecom bidding fails

The National Government failed yesterday to sell its stake in Eastern Telecommunications Philippines, Inc., the country’s oldest telephone company, the Department of Finance (DOF) said yesterday.  Finance Undersecretary for Privatization Crisanta Legaspi said no bidders showed up during yesterday’s auction.

“We had a failed bidding,” she told reporters.  The government had hoped to sell its 10.2-percent stake in Eastern Telecoms. A total of 2.652 million “Class A” shares were put on the auction block.

With the failed bidding, Legaspi said the government will study its other options including a negotiated sale.

The shares for sale are those surrendered by former Ambassador Roberto Benedicto to the Presidential Commission on Good Government (PCGG).

As part of a compromise agreement with the PCGG, Benedicto surrendered 51 percent of his equity in ETPI consisting of 2.652 million shares equivalent to 10.2 percent of ETPI’s total capital stock.  Last July, the Supreme Court denied the petition of the heirs of the late President Ferdinand Marcos to nullify a Sandiganbayan resolution dismissing the recovery case they had filed against Benedicto.

The High Tribunal junked the case following the other party’s decision to pay the correct amount of docket fees.  In 1998, the Marcos family filed a complaint for declaration of ownership, accounting, and damages against the PCGG.

ISM Communications Corp. of former Trade Minister Roberto Ongpin spent P100 million to purchase 2.5 million class A shares of Eastern Telecoms from Smart Communications Corp. last Oct. 23 raising its stake in the company to 67.5 percent from 57.5 percent.

Last year, the telecommunications firm posted a net income P31 million from a net loss of P540 million in 2005.  The National Government hopes to be able to raise as much as P70 billion from the sale of state-owned assets this year.