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TMCNet: Regulator approves BellTell sale to SMC ally

[February 08, 2010]

Regulator approves BellTell sale to SMC ally

Feb 08, 2010 (The Manila Times - McClatchy-Tribune Information Services via COMTEX) -- MERGERS and acquisitions (M&As) are heating up in the Philippine telecommunications industry, following the acquisition of a small player by a group allied with San Miguel Corp. (SMC).

The National Telecommunications Commission (NTC) has approved the transfer of ownership of Bell Telecommunications Philippines Inc. (BellTell) to Two Cassandra-CCI Conglomerates Inc.

Two Cassandra is a shareholder of Liberty Telecoms Holdings, which is partly owned by SMC and Qatar Telecom.

Food and beverage giant SMC, which is diversifying into telecoms, utilities, energy, infrastructure and mining, also plans to acquire Express Telecommunications Co. Inc. to strengthen its hand in the industry.

Under the terms of the agreement, Two Cassandra acquired 4,000 common shares or 40 percent of the issued and outstanding capital stock of BellTell.

Two Cassandra also agreed to acquire the remaining 60 percent of the issued and outstanding capital stock of BellTell.

BellTell has an authorized capital stock of P2 billion divided into 20 million common shares with par value of P100 per share.

The company's paid up capital is P673 million.

"The telecommunication industry is a capital-intensive industry. The transfer of the shares of stock of Bell Telecommunication Philippines Inc. to Two Cassandra-CCI Conglomerates Inc. will provide BellTell the needed capital to expand its existing infrastructure and build new infrastructure to be able to contend in the highly competitive telecommunications market," the NTC said.

Two Cassandra plans to infuse about P3.6 billion into BellTel to expand its network.

The regulator earlier extended BellTel's permit up to 2012 despite its failure to roll out its mobile telecommunications network.

Belltel is a grantee of a franchise to install, operate and maintain local exchange networks and wireless local loop (WLL) in several areas including special economic zones. The company also can put up inter-exchange networks, nationwide VSAT network, international gateway facilities, and a cellular mobile telecommunications network.

Analysts earlier told The Manila Times that the economic crisis will open doors for more mergers and acquisitions ()M&As in the industry and in other capital intensive sectors, like power and banking, as firms seek partners to complete projects and refinance debt.

Earlier, the NTC said it is monitoring the ongoing M&As in the industry to guard against the establishment of a monopoly or cartel.

The regulator's statement came on the heels of the acquisition by Smart Communications Inc. of Primeworld Digital Systems Inc.

Smart acquired 33.78 million common shares, or 40 percent of PDSI's issued and outstanding capital stock.

In addition, Globe Telecom's Retirement Fund had acquired Altimax Broadcasting Co. Inc., which holds a Worldwide Interoperability for Microwave Access (WiMAX) frequency.

Smart parent Philippine Long Distance Telephone Co. earlier bought Philcom Corp. for P340 million, allowing the telecom giant to widen its reach in Mindanao.

In 2008, Globe purchased Entertainment Gateway Group and its affiliated companies for P351 million.

To see more of The Manila Times, or to subscribe to the newspaper, go to http://www.manilatimes.net. Copyright (c) 2010, The Manila Times, Philippines Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

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