PLDT, Japan's NTT, Smart in big tie-up

Philippine Long Distance Telephone Co. (PLDT), the Philippines' leading telecommunications company, sealed yesterday landmark transactions with NTT Communications Corp. (NTT Com), a member of the NTT Group of Japan, one of the world's largest telecommunications groups, and the First Pacific Group.

The transactions, which were signed at Malacañang, involved PLDT's acquisition of Smart Communications Inc. for an aggregate consideration of P37.9 billion, the subscription by a wholly owned subsidiary of NTT Com of 12.2 million new PLDT shares for cash amounting to P14.7 billion, and the forging of a strategic alliance between PLDT and NTT Com.

President Estrada witnessed the signing of the closing documents by PLDT president and chief executive officer Manuel Pangilinan, NTT Com president Masanobu Suzuki and First Pacific Co. Ltd. executive director David Eastlake.

Pangilinan said: "PLDT is delighted to finalize the formation of our strategic alliance with NTT Com and the acquisition of Smart. These transactions continue our strategy of aiming to provide an increased number of customers across the Philippines with fully integrated, high quality telecommunications services, including fixed-line and cellular, Internet and broadband. I am looking forward to the contribution NTT Com will make to our business as we continue to work on improving our operations and service levels to ensure that PLDT remains the Philippines' leading communications company."

Suzuki said: "In the dynamically changing environment of business, this alliance will have significant advantages to both PLDT and NTT Group and will pave the way for the new millennium. As PLDT president Mr. Pangilinan pointed out, migration to data services and provision of a wide variety of applications and contents are becoming an essential business in the information technology (IT) era. Furthermore, the integration of mobile and fixed services will be a key element in taking leadership in a competitive market. Our alliance with PLDT represents a logical extension of our commitment to the Philippines, which started with our investment in Smart in 1995. I am confident that NTT Com will contribute to the Philippines' development as strategic partner of PLDT."

PLDT has issued approximately 35.1 million new common shares at a value of approximately P37.9 billion in exchange for all of the issued share capital of Smart, the leading cellular operator in the country. In addition, a whollyowned subsidiary of NTT Com has subscribed in cash for approximately 12.2 million new PLDT common shares at a price of P1,202 per share, for a total issue of approximately P14.7 billion.

All government and regulatory approvals required for the completion of the transactions have been obtained, including the approvals of the National Telecommunications Commission, the Securities and Exchange Commission and the Bureau of Internal Revenue.

On completion of the transactions, the attributable economic interest in the enlarged common capital stock of PLDT will be approximately 23.1 percent for the First Pacific Group and approximately 15 percent for NTT Com.

Two NTT Com nominees join PLDT's expanded 13-member Board. The two NTT Com nominees are Taketo Suzuki and Mitsuhiro Takase. Apart from this change, the Board of PLDT will remain the same and Pangilinan will remain as PLDT's president and chief executive officer.

PLDT and NTT Com have also entered into commercial agreements under which PLDT will market managed data and other services under NTT Com's Arcstar brand to its corporate customers in the Philippines. PLDT and NTT Com have further agreed to cooperative arrangement for conventional international telecommunications services to enhance their respective international business, as will as arrangements to coordinate plans for the deployment and utilization of Internet Protocol transport capacity, and the development and promotion of Internet-related and other value-added services. In addition, PLDT will benefit from the technical expertise of NTT Com through a number of NTT Com employes to be engaged in technical advisory positions for various business areas of PLDT.