By Rhea Sandique-Carlos and Cris Larano
(Updates throughout)
MANILA--Globe Telecom Inc., the Philippines's second-largest
telecommunications firm by sales, (GLO.PH) said it launched a
tender offer Tuesday to buy the balance of Bayan Telecommunications
Inc.'s $200 million worth of debt notes due 2006.
The offer involves buying the remaining principal amount of
$184.5 million, Globe said in a statement to the stock
exchange.
Globe, which counts Singapore Telecommunications Ltd. and
Philippine conglomerate Ayala Corp. as major shareholders, also
reached a separate deal with bondholders including global
distressed debt funds, according to a person familiar with the
deal, amounting to about $293 million worth of Bayantel's debt.
Those bondholders include Goldman Sachs Group Inc.'s special
situations group, U.S. funds Clearwater Capital Partners and Avenue
Capital, and U.K.-based Spinnaker Capital, according to the
person.
The amount Globe will pay will depend on the acceptance level of
the tender offer, the company said. For instance, it will pay $280
for every $1,000 worth of notes if the acceptance level is less
than 75%. The tender offer will expire Dec. 18.
If the tender offer is successful, Globe will become the major
creditor of Bayantel and will perform the roles of Bayantel's
creditors in respect to the rehabilitation plan, Globe's chief
financial officer Albert de Larrazabal said in a statement.
"Potentially combining Globe's assets and capabilities with
(Bayantel) through collaborative business efforts will enable both
companies to become more competitive and will help accelerate the
completion of Bayantel's rehabilitation," he said in a
statement.
Globe said it is also offering to buy the debt of Bayantel
affiliate Radio Communications of the Philippines Inc. It didn't
specify an amount.
Globe said it has been in talks with debt-ridden Bayantel "that
will enable both companies to become more competitive in the
current business environment."
Globe and Bayantel already share radio frequencies to ease
congestion problems, particularly that being experienced by
cellular subscribers of Globe.
The deal is the latest consolidation in the country's telecoms
sector, after Philippine Long Distance Telephone Co. acquired a
majority stake in mobile service provider Digital
Telecommunications Philippines Inc. in March 2011.
Bayantel is the telecommunications unit of Lopez Holdings Corp.
(LPZ.PH).
Citigroup Inc. advised Globe on the transaction.
-Isabella Steger contributed to this article.
Write to Rhea Sandique-Carlos at
rhea.sandique-carlos@dowjones.com and Cris Larano at
cris.larano@dowjones.com
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