GLOBE Telecom Inc. and Bayan Telecommunications Inc. (Bayantel) called on the Court of Appeals (CA) to dismiss the case instigated by Philippine Long Distance Telephone Co. (PLDT) against the takeover venture the two firms are currently completing for “utter lack of merit.”
The two telecommunications firms submitted a joint rejoinder on October 30 to the 17th Division of the appellate court. They asked the magistrates to correspondingly lift the temporary restraining order it issued on October 9 against the National Telecommunications Commission (NTC) and to deny the granting of a writ of preliminary injunction.
In the petition, Globe maintains that PLDT is “pushing its bully’s agenda on flimsy grounds [and] shows it will stop at nothing to prevent a P5-billion rehabilitation effort by Globe from seeing the light of day.”
The Ayala-clan led telco also insists “ironically, petitioner has the audacity to pontificate that Bayantel and Globe are the ones conspiring ‘to create an anticompetitive environment’ in the telco industry.”
PLDT’s “overstated right” to be protected has no basis since the rehab will simply put back a far third player on its feet—not becoming “unfair competition” at all, Globe said.
Bayantel’s co-use of its radio frequencies with Globe “are not at all inimical to petitioner PLDT nor to the industry or the subscribing public as they will not only mean the success of Bayan’s rehabilitation but a benefit for the rapidly expanding consumer market by empowering them with more choices and faster and better products and services.”
“Furthermore, there is no issue on the need for a Congressional approval with the alleged franchise transfer since what is being transferred are only Bayan’s shares of stock and not its franchise,” the petition read, citing a jurisdiction involving PLDT itself.
The Lopez-led carrier is currently under corporate rehabilitation under guidance of the Regional Trial Court in Pasig City Branch 158.
The case stemmed after the rehabilitation court approved Bayantel’s amended rehabilitation plan and master restructuring agreement which allowed its creditors the option to convert their restructured debt in the total amount of $114 million into additional equity. As the principal creditor, Globe agreed to convert its exposure into 56.6 percent of Bayantel’s oustanding shares.
However, the Public Service Law requires the approval of the telco regulator for the transfer of more than 40 percent of a grantee’s subscribed capital stock.
Globe acquired 98.26 percent of Bayantel’s loans and 100 percent of the liabilities of Radio Communications of the Philippines Inc. (RCPI).
RCPI is a unit of Bayantel, both of which are owned by the Lopez Group. The acquisition cost $130 million, lower than the $400-million face value of Bayantel’s aggregate debt.
Once completed, Globe would effectively hold a 57-percent stake in Bayan. The Lopez family is looking at divesting its entire shareholding in its telco business, pending the approval of the NTC. The acquisition would aid Globe in further improving the quality of its network as it would enable further growth in data with the additional spectrum from the Lopez-led firm, Fitch Ratings earlier commented. The corporate restructuring program of the cash-strapped telecommunications firm was seen to be completed by yearend, but may be delayed by the stay order.
Jae Denise Adolfo and Lorenz S. Marasigan