MANILA, Philippines - Ayala-owned Globe Telecom Inc. will acquire a stake in Bayan Telecommunications Inc. by the first quarter of 2013, Globe CEO Ernest Cu said.

In an interview with Rappler on Thursday, December 20, Cu said they have bought nearly 100% of BayanTel's debt from creditors, paving the way for Globe's equity investment in the Lopez-led telco.

Asked whether the equity deal is in the bag, Cu said "yes. We will close it by the first quarter."

In November, Globe launched a tender offer to buy BayanTel's remaining 13.5% senior notes, and the debt of its unit Radio Communications of the Philippines Inc.

Globe announced in a stock exchange disclosure December 20 that it successfully completed the offer on December 18, with 92.90% of the aggregate principal amount of BayanTel's notes sold by creditors.

Globe will pay $310 for every $1,000 of the notes sold prior to the December 11 "early tender" date, and $307.50 for notes tendered after that date and on or before the end of the offer period.

It expects to settle payments no later than December 21.

BayanTel has been under rehabilitation since July 2004 after its dollar debt ballooned to $325 million due to the devaluation of the peso over a decade ago. Under the rehab program, BayanTel settles a portion of its debt every semester and pays interest on a quarterly basis, until the debt gets wiped out by 2023.

Globe has now assumed the creditors' role in the rehab plan.

As the company began negotiations with BayanTel's creditors, it also started separate discussions with its shareholders for a stake.


Globe and BayanTel currently share radio frequencies to ease network congestion problems.

Aside from this telco deal, Globe is also looking at a content partnership with another Lopez unit, broadcasting network ABS-CBN Corp. – Rappler.com