The National Telecommunications Commission (NTC) approved the operators' joint application for the conversion of Bayantel’s $423.3 million debt into shares, in which Globe would take at least a 54% stake in the company.
The approval comes nearly two years after Globe and Bayantel filed their application in October 2013. Globe had acquired a 38% interest in Bayantel in 2013 after it converted the operator’s debt into common shares. It had planned to further convert a portion of the $423.3 million debt to raise its stake to as much as 56.6%.
“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,” said Froilan M. Castelo, Globe’s general legal counsel.
“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 said.
The planned takeover has met with opposition from Philippine Long Distance Telephone (PLDT), saying a merger would hinder competition.
The regulator said that safeguards have been adopted to ensure a level playing field, such as conditions attached to the approval of the frequency sharing arrangement between Globe and Bayantel. Last November, the Philippines’ Court of Appeals approved the joint use of 1.8GHz spectrum by Globe and Bayantel.
“The Commission finds that the acquisition by Globe of controlling interest in Bayantel pursuant to the court-approved amended rehabilitation plan and master restructuring agreement neither poses any prejudice to the public interest and convenience nor will make the service fail to operate or function better,” said the NTC.
