Court finds Retelcom petition for rehab sufficient

Republic Telecommunications Holdings, Inc., which used to be the rival of Philippine Long Distance Telephone Co., secured a stay order from the Makati Regional Trial Court after it filed a 15-year rehabilitation plan. In a four-page order, judge Joselito Villarosa appointed lawyer Pamela Barbara D. Quizon-Labayen as rehabilitation receiver. Retelcom and subsidiaries listed Philippine Telegraph and Telephone Corp. (PT&T), Philippine Wireless Inc., Capitol Wireless Inc. and Wavenet Philippines Inc. filed a rehabilitation plan to pay off its debts. “A financial distress experienced by any member of the Retelcom Group will undoubtedly affect the financial condition and/or operations of the subsidiaries in the Retelcom Group. Hence, the involvement and participation of all the Retelcom Group are essential under the terms and conditions of the proposed rehabilitation plan," Villarosa said in the order dated Aug. 24. Based on the report of independent public accountant Feliciano O. Nidoy Jr., the group has current liabilities hitting P1.11 billion while assets worth P608.98 million. The rehabilitation plan aims to transform Retelcom Group as one of the leading providers of broadband wireless access for the next generation broadband communications services. The group intends to settle its outstanding liabilities except suppliers’ credit or short-term working capital loans by converting these to equity, specifically as preferred shares of the subsidiaries. The shares will be redeemed at full value on the 15th year with a return of more than 20 percent per year to the shareholder. Last week, the PT&T board of directors was granted the authority to file a petition for its corporate rehabilitation or suspension of payments with the court. Its president and chief executive Jose Luis Santiago will represent the corporation in the petition and execute the documents for corporate rehabilitation. A diversified telecommunications, PT&T was incorporated on Nov. 14, 1962. Its shares were suspended from trading in Dec. 13, 2004. It is into local exchange carrier, business convergence and retail distribution network. It provides a variety of services ranging from internet based services to traditional products such as vodex, payphone, faxgram, telegraph and others. It has trimmed its net loss during the nine-month period ending March 2009 at P88.12 million P671.625 million amid lower revenues, PT&T said in a regulatory filing. The company cited drop in revenue and sales for traditional services while broadband is becoming more popular and customers prefer this new technology to the traditional service due to price difference and the flexibility of the service. -Ruby Anne M. Rubio, GMANews.TV