Liberty Telecoms raising authorized capital to P6.8 billion

MANILA, Philippines - Liberty Telecoms Holdings Inc. (LTHI) is raising its authorized capital stock to P6.8 billion from P2 billion to allow the infusion of fresh and additional equity.

Documents filed with the Securities and Exchange Commission show that of the P4.8 billion increase in capitalization, P2.97 billion has been subscribed while P955.61 milion has been paid up.

Among those who subscribed to the capital increase were Wi-Tribe Asia Ltd. (P367.66 million), Vega Telecom (P587.95 million), and White Dawn Solutions Holdings Inc. (P244.39 million).

Upon the infusion of new capital, LTHI’s foreign equity would stand at 18.4 percent. Diversifying conglomerate San Miguel Corp. has acquired approximately 32.7 percent of LTHI for an estimated P2.2 billion and plans to raise its total shareholdings in the telecommunications firm to up to 49 percent.

San Miguel said it intends to pursue the acquisition of the remaining 16.3 percent of LTHI in coordination with its joint venture partner, Qatar Telecom. (QTel). In May 2008, QTel acquired 27 percent of LTHI through subsidiary WI-Tribe Asia Ltd.

LTHI intends to primarily focus on providing fixed broadband Internet and voice service to premium households and small-and-medium enterprises and complement it with a mobile broadband offering. 

San Miguel has been actively diversifying its portfolio away from food and beverage and is eyeing high growth sectors like power, infrastructure, telecommunications and mining.

LTHI, on the other hand, is hoping to get a slice of the growing wireless broadband market by using Wi-max (Worldwide Interoperability for Microwave Access), a telecommunications technology that provides wireless transmission of data at speed of up to 72 megabit/s without the need for cables.

LTHI will likely be the corporate vehicle of the joint venture between San Miguel and QTel in their bid to penetrate the local wireless voice and data telecommunications services market.

The company’s shift to wireless broadband market was due to the booming demand for broadband Internet connectivity given increasing demand for online education, Voice-Over-Internet Protocol (VOIP) and gaming, as well as improving affordability of PCs and strong government commitment to develop IT and Internet-related sectors.

In particular, LTHI is hoping to provide high bandwidth service to upper and middle class households and SMEs, lower to middle class and 1 high-end mobile users.