Globe says tender offer for BayanTel debt completed 

Globe Telecom Inc., a joint venture of Ayala Corp. and Singapore Telecommunications, is a step closer to owning a significant share in the Lopez-controlled Bayan Telecommunications Inc. (BayanTel).

 

Globe assistant corporate secretary Marisalve Ciocson-Co said in a disclosure to the Philippine Stock Exchange (PSE) Thursday the company has completed its tender offer to all outstanding holders of 13.5 percent senior notes of BayanTel originally due last December 2006.

 

About 92.90 percent of the BayanTel notes was tendered and not withdrawn, Ciocson-Co noted.

 

The settlement of the tender is on Friday, Dec. 21.

 

The bondholders of BayanTel include Avenue Asia Investments LP., Avenue Asia International Ltd., Avenue Asia Special Situations Fund II L.P., Avenue Asia Capital Partners L.P., and Van Eck Global Opportunity Masterfund Ltd. Its Domestic creditors include Development Bank of the Philippines,  United Coconut Planters Bank, and Land Bank of the Philippines.

 

The publicly-listed telco launched last Nov. 6 a tender offer for the outstanding notes and bonds of BayanTel and Radio Communications of the Philippines Inc. (RCPI).

 

It has extended the early tender date of the offer – to buy in cash the 13.5 percent BayanTel Senior Notes originally due in 2006 – to Dec. 18 instead of the first extension of Nov. 27, Globe earlier announced.

 

All holders who tendered the BayanTel notes on or before the extended early tender date would receive the total cash consideration equivalent, minus $2.50 for each $1,000 remaining principal amount of the debt.

 

Last Nov. 6, Globe said it commenced separate discussions with the controlling shareholders of BayanTel on a wide range of commercial arrangements, including a potential acquisition of an equity interest in the cash-strapped BayanTel.

 

Once the offer is complete, Globe's chief financial officer Albert de Larrazabal said in an earlier statement that the company would become the major creditor of BayanTel and would perform the role of creditor in relation to the BayanTel rehabilitation plan.

 

"Potentially combining Globe's assets and capabilities with [BayanTel] through collaborative business efforts will enable both companies to become more competitive and will help accelerate the completion of BayanTel's rehabilitation," Larrazabal said.

 

Globe and BayanTel shared radio frequencies to ease congestion problems as experienced by Globe's mobile subscribers, an arrangement that was approved by the National Telecommunications Commission (NTC).

 

Last August, Lopez Holdings Corp. president Salvador G. Tirona confirmed that the Lopez group remains open to selling its telecommunications business that has been under rehabilitation since July 2004 – after its debt swelled to $325 million.

 

BayanTel was able to settle P8.19 billion in debt since it filed for corporate rehabilitation in 2004. In the first nine months of 2012, the company paid P908.3 million worth of debt.

 

The debt-ridden telco provider had been subject to court-supervised rehabilitation proceedings since 2003 and intends to pay its $325 million outstanding debt within 2023. — VS, GMA News