Globe Telecom approaches NTC for green light on Bayan takeover

12 Nov 2013

Globe Telecom of the Philippines has submitted a request with the National Telecommunications Commission (NTC), seeking approval for its plan to take control of struggling fellow operator Bayan Telecommunication Inc (Bayan). President and CEO of Globe Ernest L Cu is quoted as saying: ‘In anticipation of the court mandated second tranche of conversion that would potentially bring Globe ownership to Bayan into majority, Globe and Bayan filed last October a joint application for regulatory approval with the NTC for the change in the controlling interest in Bayan.’ It is understood that the first tranche of conversion was completed last month, after Bayan issued common shares equivalent to 39% of the company, to Globe and its senior creditors. Prior to that, Globe had bought up 98.26% of the telco’s loans, along with 100% of the liabilities of Bayan unit, Radio Communications of the Philippines (RCPI). It paid out a total of USD130 million, significantly lower than the USD400 million book value of Bayan’s total debt. The conversion of 69% of Bayan debt into equity would give Globe an equity ownership of 55%. ‘We reiterate that the restructuring of the debts and Globe’s conversion into equity could further strengthen collaboration with Bayan in respect to our leg networks, corporate data and broadband businesses,’ Cu added, saying he expects to receive NTC approval within the year.

Philippines, Globe Telecom (incl. Innove), National Telecommunications Commission (NTC)