Globe used ‘excess funds’ to buy Bayan debt - CFO
MANILA, Philippines - Ayala-led Globe Telecom Inc. used “excess funds” to finance the purchase of the debts of Bayan Telecommunications Inc. and its subsidiary.
The funds consisted of loans and capital expenditure budget, Globe CFO Albert de Larrazabal said.
“Excess funds are a result of some additional debt we did in 2012, plus timing on capex spend,” he said.
Globe is now the biggest creditor of Bayan after completing the acquisition of the debts of the Lopez-led firm and its unit Radio Communications of the Philippines Inc.
The purchase paves the way for Globe’s planned equity investment in Bayan.
In an interview with Rappler in December, Globe CEO Ernest Cu projected the company would be able to close a deal for a stake in Bayan by the first quarter of 2013.
Bayan has been under rehabilitation since 2004. Under the rehab program, the company settles a portion of its debt, mostly in dollar, every semester and pays interest on a quarterly basis, until the debt gets wiped out by 2023.
Bayan told earlier reports it had settled over P8 billion obligations since its rehab, and now has an outstanding debt of P20 billion. – Rappler.com