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Lopezes mull sale of entire stake in Bayantel

Lawrence Agcaoili (The Philippine Star) - May 15, 2014 - 12:00am

MANILA, Philippines - The Lopez family may sell its entire stake in cash-strapped Bayan Telecommunications Inc. to Ayala-led Globe Telecom Inc. within the year.

ABS-CBN Convergence Inc. president Carlo Katigbak told reporters after the Annual Stockholders’ Meeting of ABS-CBN Corp. that talks are ongoing regarding the sale of the remaining stake of the Lopezes in Bayantel.

“That’s being discussed,” Katigbak revealed.

Globe is looking at converting up to 69 percent of Bayantel’s debt into a 57-percent equity in Bayantel.

Discussions are ongoing for the remaining stake of the Lopezes that would likely be reduced to a little over 40 percent after the debt to equity transaction.

By acquiring Bayantel’s debt, Globe hopes to enable Bayantel’s continued viability as a telecommunications provider.  Such a restructuring would allow Globe to further strengthen collaborative efforts with Bayantel in respect of their local exchange networks, corporate data and broadband businesses.

Katigbak said the Lopezes expect to close the transaction with Globe within the year.

Globe expects the National Telecommunications Commission (NTC) to approve the amended rehabilitation plan of Bayantel earlier approved by the Pasig City  Regional Trial Court within the second quarter of the year.

In May last year, Globe and the Lopez Group asked the rehabilitation court to restructure Bayantel’s $423.3-million debt to prevent default.

Bayantel’s outstanding debt stood at $497 million when it was placed under corporate rehabilitation in 2004. It has reportedly settled a total of P8.19 billion since it filed for supervised rehabilitation proceedings under the Regional Trial court in Pasig City and intends to pay its $325 million outstanding debt within 2023.

In September, the Pasig RTC that has jurisdiction over the corporate rehabilitation of Bayantel confirmed the motion to amend the rehabilitation plan of the cash-strapped company in order to avoid the recurrence of default and ensure its continued viability.

The first tranche of conversion was completed in October wherein Bayantel issued common shares equivalent to a 39-percent equity stake in the cash strapped company to Globe.

ANNUAL STOCKHOLDERS BAYAN TELECOMMUNICATIONS INC BAYANTEL CARLO KATIGBAK CONVERGENCE INC GLOBE GLOBE AND THE LOPEZ GROUP GLOBE TELECOM INC LOPEZES PASIG CITY
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