Hong Kong-based industrial First Pacific Co. has no plans of divesting its controlling stake in telecommunications giant Philippine Long Distance Telephone Co. (PLDT), as it emphasized the strategic role of its investments in the Philippine telecommunications sector play in its overall business strategy.
In a telephone interview with The STAR, First Pacific managing director and CEO Manuel V. Pangilinan said rumors that is in talks with another Hong Kong conglomerate Hutchinson Whampoa for the sale of its stake in PLDT for $4 billion are “absolutely without any basis.”
Reports in some papers (not The STAR) said Indonesian businessman and First Pacific chairman Anthoni Salim is in discussions with Hutchinson for a possible sale.
“I just talked with Anthoni and Benny (Santoso) and I was assured that there are no such talks whatsoever,” Pangilinan, who is currently in the United States, said The STAR. Santoso, an Indonesian and known ally of Salim, sits on the board of both First Pacific and PLDT.
Pangilinan, who also chairs the PLDT group, emphasized the strategic importance which the investments in PLDT play in First Pacific’s regional telecommunications strategy.
He said the only discussions with Hutchinson he is aware of is the possibility of PLDT utilizing the former’s infrastructure for the offering of PLDT wireless subsidiary Smart Communications’ mobile services in Italy.
First Pacific currently has a 26.3-percent stake in PLDT. It also has a 94-percent interest in local company Metro Pacific Investments Corp. (MPIC) and a 51.5-percent shareholding in Indofood in Indonesia .
In his letter to First Pacific shareholders in March, Salim noted that PLDT’s innovative spirit in developing new and better product offerings provided the basis for another year of sustainable growth in revenues, which among others saw further unprecedented gains in cellular penetration. Emphasis, he said, is now being given to new growth areas: in broadband, video and mobile commerce, without neglecting its traditional businesses.
“We see another successful performance for PLDT in 2008,” he stated.
He also stressed that First Pacific remains focused on its search for a transformational investment that will complement and balance its current portfolio. “The increased dividend flows allow us to consider various capital management initiatives and acquisition opportunities which, together with the ongoing performance enhancements of our existing businesses, should offer steady improvement in shareholder returns in the years to come.”
In 2007, First Pacific completed the acquisition of an additional 6.4-percent interest in PLDT. The company continues to evaluate new investment opportunities in the telecommunications sector in the Asian region.
It noted in its 2007 report that PLDT’s profit contribution to the First Pacific Group increased 28 percent to $177.5 million driven by continuous growth in cellular, knowledge processing solutions, customer interaction services businesses, and high demand in cellular and broadband services.