First Pacific douses rumors regarding sale of PLDT stake

Hong Kong-based conglomerate First Pacific Co. (FPC) has officially doused persistent speculations it is selling its controlling stake in Philippine Long Distance Telephone Co. (PLDT).

“First Pacific wishes to state and clarify that it is not in discussion whatsoever with any party with regard a possible disposal of any of its shares in PLDT. PLDT continues to deliver significant growth in profit and cashflow contribution to First Pacific, and remains a core investment for First Pacific,” it said in a statement released yesterday.

As early as July this year, rumors circulated that FPC, in particular its chairman Anthoni Salim, is in talks with Hutchinson Whampoa for the sale of its stake in PLDT for $4 billion.

However, in a telephone interview with The STAR, First Pacific managing director Manuel Pangilinan said that rumors the Hong Kong-based conglomerate is in talks with Hutchinson Whampoa for the sale of its interest in PLDT are absolutely without any basis. “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, told The STAR.

Pangilinan, who also chairs the PLDT group, emphasized the strategic importance which the investments in PLDT play in FPC’s regional telecommunications strategy.

He said the only discussions 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.

FPC 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 FPC 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 is now being given to new growth areas: 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 FPC 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,” he said.

In 2007, FPC completed the acquisition of an additional 6.4-percent interest in PLDT as 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

Total cash dividends by PLDT for 2007 amounted to P184 or $4.01 per share, representing 100-percent payout of 2007 core earnings

For this year, First Pacific said its goals include enhancing the profitability of operating companies, expanding its business portfolio with complementary investments in telecoms, infrastructure, natural resources, and consumer products in the emerging markets of Asia , and managing capital within the company’s overall investment plans and financial position to enhance shareholder returns.