If you were experiencing poor signal subscription services in the past from your Bayantel-hosted landline or broadband connections, listen to this. Those days will soon be over now that the National Telecommunications Commission (NTC) approved the green light for the conversion of Lopez-owned Bayan Telecommunication‘s debt-to-equity to Globe Telecom.
“The company (Bayan) can now concentrate on delivering better service to its customers,” said Salvador Tirona, president and CEO, Lopez Holdings.
Records show that Bayan has been under a court-assisted corporate rehabilitation for nearly 23 years. In August 2013, “the regional trial court Branch 158 in Pasig City confirmed the amendment of Bayantel’s Rehabilitation Plan where Bayan’s principal creditor Globe, will be authorized to convert its debt holdings into a controlling interest of at least 54% in Bayan’s outstanding share.”
Globe now owns 54% majority shareholder of Bayan. In return, the outstanding principal debt of Bayan would be reduced by 69% to $131.3 million from $423.3 million.
But of course, this was not a sweet victory for the Ayala-led Globe Telecom. Philippine Long Distance Telephone Company (PLDT) has been opposing the takeover of Bayantel by Globe, arguing that “there appeared to be no reasonable financial benefit for Globe to acquire Bayantel, which had a capital deficit or negative retained earnings of P15.87 billion ($352.05 million).”
Smart Communications, Digitel Mobile Philippines Incorporated, Cruz Telephone Company Incorporated, Philippine Association of Provate Telephone Companies, Eastern Telecommunications Philippines Incorporated, Telecommunications Technologies Philippines Incorporated, and Next Mobile, also opposed the takeover.
The NTC decision, dated July 2, 2015, was signed by NTC Commissioner Gamaliel Cordoba and Deputy Commissioners Carlo Martinez and Delilah Deles.
The case has been dragging for years following the opposition from all of the mentioned telephone companies.
NTC said “the acquisition by Globe of controlling interest in Bayantel pursuant to the court-approved Amended Rehabilitation Plan and Master Restructing Agreement neither poses any prejudice to the public interest and convenience nor will make the service fail to operate or function better.”
“The debt-to-equity conversion transaction between Globe and Bayan will precisely enable the latter’s continued viability as a service provider, allowing it to exit rehabilitation and enhance its current service offering to the public,” Globe’s general counsel Froilan Castelo told the press.
“Globe will certainly add value to Bayantel, bringing financial and technical support and synergies, as well as experience and our own culture of innovation,” he added.
The Globe and Bayantel alliance will not affect Bayan’s corporate existence as it will be separate and distinct from Globe and will strengthen Bayantel’s operations and ensure long-term business continuity and stability.
Sources: Newsbytes Philippines, Rappler, and ABS-CBN News
Photo taken by Honor 6
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