BayanTel petitions court to shelve Extelcom’s rehab plan

5 Feb 2010

The Manila Standard Today reports that Filipino telco Bayan Telecommunications Inc (BayanTel) has asked the Supreme Court to ditch a court-imposed rehabilitation plan for troubled domestic operator Express Telecommunications Company (Extelcom), saying its own business model for the company would be more economically viable. Extelcom has been at the centre of takeover rumours for at least a year. In July 2009 CommsUpdate reported that another Filipino firm, San Miguel Corp, had hoped to complete its acquisition of Extelcom within months, and had reportedly signed the purchase agreement. It was rumoured that the seller – entrepreneur Roberto Ongpin and UK-based Ashmore Investment Management – had an undertaking to ‘clean up the company’ before San Miguel assumed management control said. The Ongpin-Ashmore group were to purchase shares in Extelcom from the telco’s creditors Trans Digital Excel, as Extelcom was currently under corporate rehabilitation with a total outstanding debt of PHP9.017 billion (USD186.9 million). Trans Digital, a major creditor of Extelcom, still owns 60% of the company.

BayanTel and its partner Marifil Holdings Corp have now submitted a 106-page petition in which they argued their proposed rehabilitation plan would enable Extelcom to generate cumulative revenue of PHP1.8 billion over ten years. Its filing said: ‘Unless the approved rehabilitation plan is altered or modified… there will be no improvement in the trend of Extelcom’s financial performance … no telecommunications carrier will partner with Extelcom because of its unattractive business plan and insufficient cash generation.’ BayanTel, the telecom unit of Lopez-owned Benpres Holdings Corp, claims that it is a perfect commercial partner for Extelcom because of its sufficient capital and technical expertise in wireless communications service. BayanTel has offered to share its provincial wireless local loop revenues and its EBITDA from roaming service for foreign visitors with Extelcom in exchange for the use of the latter’s frequencies in the 800MHz band.

Philippines, Bayan Telecommunications (Bayantel),

Subscribe

Subscribe to CommsUpdate to get the day’s top telecom headlines delivered to your email.

Subscribe to CommsUpdate

Feedback

Have feedback, corrections, or story ideas? Send them to editors@commsupdate.com.

Browse Past Issues

Filter

Filter CommsUpdate by the following categories or use the search.

Search

Visit our help page information on performing advanced searches, including how to restrict the results by country or company.

Advertise

CommsUpdate is an outstanding advertising venue for companies seeking to reach:

  • International carriers
  • Wholesale service providers
  • Equipment and software vendors
  • Telecom investors
  • Regulators

Learn more about advertising on CommsUpdate.

Share