Globe expects complete takeover of Bayantel this yr

MANILA, Philippines - Ayala-led Globe Telecom Inc. sees the complete take over and the early exit of cash- trapped Bayan Telecommunications (Bayantel) within the year.

Globe president and chief executive officer Ernest Cu said the company is set to start talks with the Lopezes upon getting the green light from the National Telecommunications Commission (NTC).

“Well the objective is to have as much of the shares and continue to control as much of the company as we can because that is the only way you can extract the synergies and I think part of what has been approved or trying to get approved is that the control aspect,” Cu said.

He pointed out that the Lopezes are open to selling their control of the ailing telecommunications provider.

“Yeah am sure they (Lopezes) are at this stage. They really have not done much about the company at this stage and they are focusing much of their attention on ABS-CBN Mobile,” he added.

Globe and Bayantel already filed a joint application for regulatory approval with the NTC for the change in controlling interest in Bayantel last Oct. 11.

In September, the Pasig Regional Trial Court (RTC) that has jurisdiction over the corporate rehabilitation of Bayantel confirmed the motion to amend the rehabilitation plan of the cash-strapped company to avoid the recurrence of default and ensure its continued viability.

The approved rehabilitation plan seeks to significantly reduce the debt burden of Bayantel through a conversion of up to 69 percent of the debt into equity.

Applicable to all creditors of Bayantel, the conversion aims to reduce the outstanding debt of Bayantel to around $131 million in two separate tranches of conversion and would result to Globe ownership of up to 55 percent of Bayantel.

The first tranche of conversion was completed in October wherein Bayantel issued common shares equivalent to a 39 percent equity stake in the cash-strapped company to Globe.

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.

The current outstanding principal amount of Bayantel’s debt stood at $423.3 million and would be reduced to $131.3 million upon a full debt-to-equity conversion with the Lopezes as part of the restructuring.

Earlier, Globe chief financial officer Alberto de Larrazabal confirmed that discussions are ongoing for the remaining stake of the Lopezes that would likely be reduced to a little over 40 percent after the debt to equity transaction.