GMA News writes that in a joint motion filing, fellow Filipino operators Globe Telecom and Bayantel Telecommunications Inc (Bayan) have submitted plans to restructure USD423.3 million worth of cash-strapped Bayan’s debts to ensure it does not default on its payment obligations. In an emailed statement, 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 restructuring plan, Bayan’s outstanding (principal) debts would be trimmed to USD131.3 million, through a debt-to-equity transaction with Bayan-backer the Lopez Holdings Corp, while Globe would also convert up to 69% of the current outstanding debt into Bayan shares. According to Lopez Holdings spokesman Enrique Quiason, ‘Bayan’s operations have not generated sufficient revenue to continue making the debt payments under its existing rehabilitation plan’. The official went on to say that increased market competition and a decline in traditional fixed line services have impacted on Bayan’s ability to make considerable capital investments while under its high debt burden. The restructuring plan is designed to strengthen collaboration between Globe and Bayan – in terms of local exchange networks, corporate data and their respective broadband businesses.