Ailing Filipino telco Bayan Telecommunications (Bayantel) aims to expand its service as soon as the National Telecommunications Commission (NTC) approves its takeover by domestic rival Globe Telecom. Online news journal InterAksyon quotes Alberto M. de Larrazabal, chief finance officer of Globe, as saying: ‘[The expansion of Bayantel] would be part of the overall coordinated expansion after NTC approval … Actually [Bayantel] is cash flow positive. It is just their interest burden [that] is way too high … They will get back to profit. That, together with the synergies that we will put together, I think it will be a good sustainable investment.’
According to TeleGeography’s GlobalComms Database, in December 2012 Globe acquired 98.26% percent of Bayantel’s loans and 100% of Radio Communications of the Philippines Inc’s (RCPI’s) liabilities; RCPI is a unit of Bayantel, both of which are owned by the Lopez Group. The acquisition cost USD130 million, lower than the USD400 million face value of Bayan’s aggregate debt. As Bayantel’s largest creditor, Ayala-led Globe intends to convert its debt holdings into at least 54% of the former’s outstanding shares.
Indeed, in a joint application, filed back in October 2013, Globe Telecom sought authorisation from the NTC to take a controlling stake in Bayantel, although the watchdog has dragged its heels after pressure from a number of key Filipino players. Philippine Long Distance Telephone (PLDT) and its subsidiaries Smart Communications and Digitel Mobile, as well as NOW Telecom (formerly Next Mobile), have all lodged their opposition to the takeover.