14 Jun 2010
The Philippines’ Lopez Group is mulling a move which would see it merging its telecoms arm Bayan Telecommunications Holdings Corp (BayanTel) into its media division ABS-CBN Broadcasting Corp, The Business Mirror writes. It is thought the move is part of efforts to increase synergies between the two firms. Benpres Holdings Corp chairman Oscar Lopez is quoted as saying the plan for convergence is being spearheaded by ABS-CBN chairman and CEO Eugenio L Lopez III. However, in order for the plan to be realised, Lopez needs first to resolve the court-mandated restructuring programme imposed on the telco six years ago. Benpres is the listed holding company for the Lopez group’s energy, media and telecoms businesses. It owns a majority stake in BayanTel together with privately held Lopez Inc. Meanwhile, Benpres also controls a 57% stake in ABS-CBN.
Local industry watchers say it is unclear as to how BayanTel’s sizeable debts will impact on the balance sheet of ABS-CBN, a profitable company which is currently forecasting ‘significant’ double-digit growth in 2010, up from PHP1.7 billion last year. At the end of 2009, BayanTel had reportedly paid a total of PHP1.42 billion for both principal and interest obligations. This brings the company’s debt payments to PHP5.92 billion since 2004. The telco’s 1Q10 net revenues dipped 7% year-on-year to PHP1.522 billion compared with the same period in 2009. BayanTel’s data business, which accounts for half of total revenues and includes direct subscriber line and corporate date services, were ‘slightly’ down during the period under review.