MANILA, Philippines – Telecommunications giant Globe Telecom is hopeful it will get the approval of the National Telecommunications Commission (NTC) this year or in 2014 for the acquisition of cash-strapped Bayan Telecommunications Inc. (Bayantel).
Globe president and CEO Ernest Cu said in a press conference on Monday, November 11 that both companies have sought the approval of the regulator for Bayantel’s debt restructuring.
The parties have a debt-to-equity conversion deal that allows Ayala-led Globe to acquire controlling stake in Bayantel, controlled by the Lopez group.
The debt-to-equity deal was approved by the Pasig Regional Trial Court in September. (READ: Court clears Globe’s takeover of Bayantel)
To prevent Bayantel from defaulting on its debt, the court gave its nod for the company’s $423.3-million debt to be restructured.
Under the plan, Globe will convert 69% of Bayantel’s debt into equity, giving Globe a 55% stake. The Lopez group’s stake in Bayantel will shrink to around 40%.
Cu stressed that the restructuring, which will make the telco business viable, is “in the best interest of Bayantel employees suppliers, stakeholders, and subscribers.”
It will also boost the synergy between the two companies as they merge broadband businesses, corporate data and local exchange networks.
Globe core net profit up in first 9 mos
Core net profit of Globe rose 9% in the first 9 months from a year ago on higher revenues from its mobile, broadband and fixed-line data business.
In a statement on Monday, the firm said its core net income in January to September reached P9.5 billion, against P8.7 billion in the same period last year.
Steady revenue growth was seen in the following segments: mobile – 8%; broadband – 22%; and fixed line data – 12%.
Revenues however were offset by higher foreign exchange losses and increased “accelerated depreciation costs.” – with a report from Cherrie Regalado/Rappler.com