Mislatel in talks with Bank of China for funding

MANILA, Philippines — Beijing-based Bank of China, the country’s fourth largest bank in terms of assets, is in talks with the new third telecommunications player for possible funding requirements.

Deng Jun, country head of Bank of China – Manila Branch, told The STAR the bank is strongly supporting the third telecom project in the Philippines which was awarded to the Mindanao Islamic Telephone Co. (Mislatel) Group.

“The discussion between Bank of China and the consortium on the financing model for third telecom project is still ongoing,” he said.

The National Telecommunications Commission (NTC) has officially confirmed the Mislatel Group composed of China Telecommunications Corp. and Dennis Uy’s Udenna Corp and Chelsea Logistics Holdings Corp. as the new third telco player in the country, competing with PLDT Inc. and Ayala-led Globe Telecom.

The consortium has committed network coverage of 84 percent of the population in the entire country after five years, with total investments of P257 billion.

The winning group emerged as the lone qualified bidder, edging out three other groups which had submitted formal offers to the government. There were originally 10 groups aspiring to be the country’s third major telecom provider.

Publicly listed company PT&T and a Chavit Singson-backed LCS Group of Companies and TierOne consortium were the two other groups that submitted bids.

However, after a preliminary evaluation conducted by the new major player selection committee, only Mislatel’s bid was given the green light, with the PT&T and LCS-TierOne bids turned down for lacking certain requirements.

LCS-TierOne failed to submit its participation commitment, while PT&T failed to submit a certification of technical capability from the NTC.

Bank of China could help the winning consortium via a syndicated loan, equity offering, among others to help raise the required funds for the third telco project in the Philippines.

“We will disclose the final proposal with the consent of the consortium,” Deng said.

As the winning consortium, the Mislatel group needs to have a minimum paid up capital of P10 billion. It is also required to post a security bond of P25 billion or equivalent to 10 percent of its five-year investment commitment.