Globe takes over Bayantel. image: Business World Online
GLOBE Telecom, Inc. has reached a buy-out deal worth ₱1.83 billion with the Lopez group that will give the Ayala-led company full control of cash-strapped Bayan Telecommunications, Inc.
The move is seen to help Bayantel completely get out of the doldrums by 2023.
"Globe Telecom, Inc. has agreed to purchase from Bayan Telecommunications Holdings, Corporation (BTHC) and Lopez Holdings, Corporation (LHC) all the equity in the capital stock of Bayan Telecommunications, Inc. that is held by BTHC and LHC, valued at approximately ₱1.83 Billion Php," Globe said in a disclosure to the Philippine Stock Exchange yesterday.
Globe will boost its control over Bayantel to 98.57% from 56.87%, through a debt-to-equity conversion scheme involving up to 70.76 million shares. The transaction is under Bayantel's rehabilitation plan and was approved by the National Telecommunications Commission on July 2.
Globe already acquired a 38% interest in Bayantel in October 2013 after the Pasig City Regional Trial Court Branch 158 approved the amended rehabilitation plan jointly filed by the companies, where Globe converted Bayantel's debt into common shares, according to the listed telecommunication firm's 2014 annual report.
Globe, as a principal creditor, had planned to further convert a portion of the $423.3-million debt, so it can hike its stake to as high as 56.6%.
"The debt-to-equity conversion transaction between Globe and Bayan will precisely enable the latter's continued viability as a service provider, allowing it to exit rehabilitation and enhance its current service offering to the public," Globe's General Legal Counsel Froilan M. Castelo had said in a July 3 mobile phone reply.
"Globe will certainly add value to Bayantel, bringing financial and technical support and synergies, as well as experience and our own culture of innovation," he added.
Globe had said it can address "increasing demand" for voice, short message, and mobile data services through the joint use of frequencies originally assigned to Bayantel. In return, Bayantel would be able to offer mobile telecommunications.
Globe shares added ₱16 or 0.63% to close at ₱2,544 apiece on Tuesday. - Business World Online
