The Philippines’ second-largest carrier Globe Telecom has filed a motion with a local court to restructure Bayan Telecom’s debt and convert it into equity.
In a stock exchange filing on 30 May, Globe said that “the motion seeks to significantly…
The Philippines’ second-largest carrier Globe Telecom has filed a motion with a local court to restructure Bayan Telecom’s debt and convert it into equity.
In a stock exchange filing on 30 May, Globe said that “the motion seeks to significantly restructure Bayantel’s financial debt in order to prevent the recurrence of default and ensure Bayantel’s continued viability.
“Following Globe’s tender offers for the Bayantel debt in 2012, Globe currently holds approximately 96.5% of the total financial indebtedness of Bayantel,” it added.
At the end of last year, Globe announced the completion of its tender offer to purchase most of Bayan’s debt, which currently stands at US$423.3m.
In an interview with TelecomFinance a few days ago, Globe CFO Albert de Larrazabal said that the operator is looking to convert some of that debt into equity in an attempt to control a majority stake in Bayantel.
“It depends on the rehab court to determine the size of the stake Globe will ultimately control,” Larrazabal stressed, adding that “the possibility of obtaining full control of the company has been discussed with the current equity owner [local conglomerate Lopez Group].”
In the filing, the company said that up to 69% of Bayantel’s liabilities will be converted into shares, leaving the fixed-line operator with a debt balance of approximately US$131.3m.
Larrazabal described Bayantel as “a good synergy for our business, a nice bolt-on”, because of its infrastructure assets in areas where Globe does not have any, as well as its spectrum in the 1800MHz band to be used for LTE.