A regional court in the Philippines has approved a new restructuring plan proposed by Lopez Holdings which clears the way for Globe Telecom to take a stake in the Lopez-led telco Bayan Telecommunications. In May this year Globe Telecom and Bayan submitted plans to restructure USD423.3 million worth of Bayan’s debts to ensure it does not default on its payment obligations. At the time Ayala-backed Globe said: ‘Globe currently holds approximately 96.5% of the total financial indebtedness of Bayan. The joint motion is intended to achieve a successful rehabilitation of Bayan at the earliest possible date.’ Under the newly approved rehabilitation plan, Bayan’s outstanding (principal) debts will be trimmed to USD131.3 million, through a debt-to-equity transaction with Lopez Holdings, while Globe will also convert up to 69% of the current outstanding debt into Bayan shares. Ultimately Globe hopes to take full control of Bayan, which has been in rehabilitation since 2003 and is expected to remain so until 2023.
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