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Bayantel to benefit from Globe debt purchase

Globe Telecom's tender offer to acquire at least 70% of Bayan Telecommunications Inc.'s (BTI) outstanding debt will strengthen BTI's operations and will ultimately benefit its customers, said Globe chief financial officer Albert de Larrazabal. More details after the jump.

"The tender offer is representative of Globe's belief in the value of BTI as a nationally enfranchised entity," said de Larrazabal, adding that BTI's debt load has hindered its performance. "Potentially combining Globe's assets and capabilities with BTI through collaborative business efforts will enable both companies to become more competitive and help accelerate the completion of BTI's rehabilitation."

Globe recently disclosed that it launched a tender offer to purchase for cash any and all of the 13.5% Senior Notes originally due 2006 issued by BTI. If the tender offer succeeds, Globe will become the major creditor of BTI, and will perform a role similar to current roles of BTI's creditors in respect to its rehabilitation plan, including representation in the monitoring committee.

The National Telecommunications Commission (NTC) also recently approved Globe's application for the joint use by Globe and BTI of the frequencies 1750-1760MHz/1845-1855MHz assigned to Bayantel. The joint use agreement will allow Globe to address increasing demand for voice, SMS and mobile data services, and will allow BTI to offer its mobile telecommunications services to customers.

"Our long term collaboration with BTI is a strategic initiative that will enable BTI to unlock and maximize the potential of its key business assets and capabilities," stated de Larrazabal. "I believe this is consistent with the objectives of the NTC, and is in the best interests of BTI's stakeholders and customers," he said further.

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