Globe eyes majority stake in Bayantel

 

Globe Telecom Inc. is eyeing a majority stake in Bayan Telecommunications Inc. (Bayantel) of the Lopez Group through a debt to equity deal, a ranking official of the Ayala-led firm said Wednesday. 

 

The Ayala-led company is looking at converting 69 percent worth of debt into a 57 percent equity in Bayantel, Globe chief financial officer Alberto de Larrazabal told reporters.

 

About 40 percent of Bayantel's outstanding $130 million debt acquired by Globe last December will be converted to shares, with another 29 percent to follow after the cash-strapped telecommunications unit of the Lopezes hikes its authorized capital stock through capital restructuring, he said. 

 

The 69 percent worth of debt acquired for about $90 million would be equivalent to a 57 percent interest in Bayantel.

 

De Larrazabal, however, said they are still waiting for “clarity” from Pasig regional trial court serving as the rehabilitation court of Bayantel. 

 

“We are a little bit concerned. In a month we hope to get clarity. The biggest uncertainty is the court process,” he said.

 

“We are discussing all options at this point in time. We may stop or we may expand,” De Larrazabal added.

 

In May, 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. 

 

The current outstanding principal amount of Bayantel’s debt stood at $423.3 million will be reduced to $131.3 million upon a full debt-to-equity conversion. 

 

Through the conversion, Globe can strengthen collaborative efforts with Bayantel in line with their local exchange networks, corporate data and broadband businesses. 

 

Other than approval from the rehabilitation court, the debt-to-equity deal will need green-lighting bystate-run National Telecommunications Commission (NTC), as it would involve the change in ownership.

 

Globe recently got NTC approval for the joint use of frequencies 1750-1760MHz/1845-1855MHz assigned to Bayantel.—SOA/OMG, GMA News