Bidders snub gov't auction of Eastern Telecom stake

The Philippine government on Tuesday declared a failed bidding for its 10.2 percent stake in the country’s oldest phone company – Eastern Telecommunications Philippines Inc. – after no bidders showed up during the public auction. “We declared a failed bidding because there were no bidders. The government would have to reassess its options," Finance Undersecretary Crisanta Legaspi told reporters. The 265.2 million class A shares that were to be sold Tuesday were surrendered by former Ambassador Roberto Benedicto to the Presidential Commission on Good Government as part of a compromise agreement with the Presidential Commission on Good Government. This is 51 percent of his equity in ETPI. The Supreme Court in July last year 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 due to their alleged failure and refusal to pay the correct amount of docket fees. In 1998, the heirs of the late strongman filed a complaint for declaration of ownership, accounting, and damages against the PCGG. But the Marcos heirs failed to pay additional docket fees computed by the court. Legaspi said ETPI’s Articles of Incorporation gives the company and its stockholders a right of first refusal and could match the highest bid to be tendered by interested investors. “That could be another option that we can consider. Under their charter, there is a provision there that we will have to offer this also to the other existing shareholders of the company," Legaspi said. She explained that the government has not announced the floor price for the asset as no one showed up during the bidding. However, ISM Communications Corp. of former Trade Minister Roberto Ongpin spent P100 million to purchase 100 million class A shares of ETPI from Smart Communications Corp. last October 23. ISM Communications now owns 67.5 percent of ETPI. The government expects to raise at least P70 billion this year from the sale of big-ticket assets. It has raised P42.3 billion in the first nine months from the sale of its 46 percent stake in Philippine Telecommunication Investments Corp. (P25.2 billion), its 20 percent interest in Philippine National Oil Co. – Energy Development Corp (P16.6 billion), the 60-hectare old Iloilo airport (P1.2 billion), and the remaining 4.6 percent stake in Philippine National Bank (P998 million). The proceeds from privatization will be used to augment the country's budget deficit. - GMANews.TV