PLDT eyeing IPO for outsourcing unit handling PAL

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The firm handling some of Philippine Airline's outsourcing requirements is eyeing additional investors and a possible initial public offering

MANILA, Philippines – Philippine Long Distance Telephone Co. (PLDT) is considering an initial public offering (IPO) or sale of its business process outsourcing (BPO) unit SPi Global Holdings. PLDT is already in talks with interested investors, disclosed its chairman Manuel V. Pangilinan.

“We don’t know again. We are looking at IPO options, strategic partnerships as SPi enlarges its business globally. No decision has been made,” said Pangilinan in a chance interview on September 12.

SPi Global operates in North America, Europe, Australia, India and the Philippines. It is one of the outsourcing companies that Philippine Airlines tapped to take on some services when it cut over 2,000 jobs last year.

In a September 4 statement, PLDT said it is undertaking a “strategic review of its portfolio,” including subsidiaries like SPi, to ready “potential options with regard to acquisitions and divestitures.”

Pangilinan said that if the company sells SPi, the proceeds will fund “general corporate services,” which could include the planned investment in GMA Network Inc. “That’s one possible outlet for it,” said Pangilinan.

But PLDT has not firmed up its plans for the funds. “I don’t think we have any specific in mind as to where to use the proceeds. We haven’t decided yet,” said the company chairman.
 
Good growth outlook

SPi expects its growth to be boosted by the double-digit growth forecast for the outsourcing industry.
 
“PLDT remains very confident in the long-term prospects of SPi given the strength of the business model and management team and believes it is well positioned to capitalize on significant market opportunities for further growth,” said the phone giant in the September statement.
 
In the first 3 months of the year, SPi Global reported P2.4 billion in service revenues, a 20% jump compared to the same period in 2011.

“We also see continued margin growth as SPi Global leverages fixed costs and infrastructure over a higher revenue base that increases seat share ratio over stable operating expenses,” said SPi Global President Maulik Parekh. He added that the company is also developing a strong sales pipeline for 2013. – Rappler.com

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