Regulator’s decision smoothes PLDT’s Digitel bid

23 May 2011

The Securities and Exchange Commission (SEC) of the Philippines has eased a rule on stock transfer rules required from Philippine Long Distance Telephone Company (PLDT), effectively easing the way for its acquisition of a controlling stake in rival Digital Telecommunications Philippines Inc (Digitel). According to online journal Business World Online, corporate regulators in the country have relaxed a stipulation requiring that PLDT surrender to an escrow account in its payment for a stake in Digitel, thus allowing the former to save more than PHP100 million (USD2.3 million) in transaction costs. SEC general secretary Gerard M Lukban is quoted as saying that the request – jointly submitted by PLDT and Digitel’s majority holder JG Summit Holdings – has already been approved ‘in principle’ and will just need to be re-filed as a formal application for ‘exemptive relief’. In an earlier letter to the financial regulator dated 9 May, the parties involved in the deal set out their request: ‘PLDT and the sellers request that the escrow requirement be waived since the collectability of the convertible bonds and advances is assured by the fact that after the transaction and tender offer are completed, PLDT shall own controlling interest in Digitel, the debtor of the convertible bonds and advances.’