Globe starts takeover of Bayantel

MANILA, Philippines - Ayala-led Globe Telecom Inc. has started its takeover of cash-strapped Bayan Telecommunications Inc. of the Lopez family after getting the green light from the Pasig City regional trial court.

Marisalve Ciocson-Co, head of legal service of Globe, said in a disclosure to the Philippine Stock Exchange (PSE) the Pasig RTC has issued a resolution approving the debt restructuring and the new master restructuring agreement submitted by Globe, Bayantel, and Bayan Telecommunications Holdings Corp.

“The resolution granted the joint motion filed by Globe and Bayantel to amend Bayantel’s current debt restructuring plan and implement a new master restructuring agreement for all of Bayantel’s creditors,” Ciocson-So ruled.

Ciocson-Co said Globe would acquire a 56.6 percent stake in Bayantel through the conversion of 69 percent of Bayantel’s total debt.

“As the largest creditor of Bayantel, Globe intends to convert its debt holdings into 38.3 percent of Bayantel’s equity initially and subsequently convert further amounts of Globe’s debt holdings when relevant regulatory and corporate approvals are obtained,” she added.

In return, she explained that the outstanding principal debt of Bayantel would be reduced by 69 percent to $131.3 million from $423.3 million.

Last May 30, Globe and the Lopez Group asked the rehabilitation court to restructure Bayantel’s $423.3 million debt to prevent default.

Bayantel’s outstanding debt stood at $497 million when it was placed under corporate rehabilitation in 2004. It has reportedly settled a total of P8.19 billion since it filed for supervised rehabilitation proceedings under the regional trial court in Pasig City and intends to pay its $325 million outstanding debt within 2023.

 â€œThe amendments also facilitate the entry of Globe into Bayantel as a shareholder and are expected to assure Bayantel’s successful rehabilitation,” Ciocson-Co added.

Bayantel chief operating officer Rafael Aguado said the Bayantel organization sees this as a positive development that will help strengthen the company’s operations and ensure Bayan’s long-term business continuity and stability.

Aguado said Globe’s entry into Bayantel could help further maximize its current capabilities to unlock the potential of its key business assets particularly in cooperate data and broadband thru synergy opportunities between the two companies.