MANILA - Smart Communications Inc. has enough funds to acquire the remaining 7.2-percent stake in Pilipino Telephone Corp. (Piltel).

The cellular firm may tap its P7.13 billion worth of deposits and an existing credit line with BDO Unibank Inc. to pay Piltel minority shareholders who will sell their shares at the offer price of P8.50. A total of 839,979,054 shares are held by Piltel’s minority shareholders.

“As a principal bank of Smart, we confirm that as of the date of this letter, Smart has a total amount of P7,139,821,959,00 in deposits and credit facilities with BDO Unibank and BDO Private Bank Inc. These funds are available for use by Smart to satisfy the full acceptance of the tender offer,” said BDO senior vice president Charles Rodriguez.

The letter, dated June 23, was submitted to the Securities and Exchange Commission.

Piltel already owns 92.8 percent of the company. Its offer price to the minority shareholders represents a 15-percent premium over the P7.40 share price when the proposed transactions were first announced.

The tender offer period will run from July 1 until the end of July 29 at noon.

Smart’s tender offer is intended to provide an exit opportunity for Piltel’s minority shareholders, given the change in Piltel’s business direction.

Piltel will cease to be a telecommunications company and become a holding unit for a substantial stake in the Manila Electric Co. (Meralco).

Piltel is investing up to P20.07 billion in acquiring approximately 20 percent of Meralco shares. Piltel has agreed to purchase a total of 223 million shares of voting common stock of Meralco from the Lopez Inc., First Philippine Holdings Inc. and First Philippine Utilities Corp.

Subject to shareholders’ approval at the annual meeting on June 30, Piltel will sell and transfer its cellular assets, subscriber base and Talk ’N Text trademark to Smart.

“Considering that [Smart] owns 92.81 percent of Piltel, it is anticipated that the acquisition will be ratified at the stockholders’ meeting,” Piltel told the stock exchange yesterday.

The acquisition, added Piltel, is a strategic investment for the Philippine Long Distance Telephone Co. (PLDT) Group because of potential opportunities for operational and business synergies, and new revenue streams and cost savings for both the PLDT Group and Meralco,” Piltel added.

PLDT chairman Manuel V. Pangilinan earlier said the partnership between a telco and a power company is unprecedented anywhere in the world. “And it is a partnership that we at PLDT mean to show the world that yes, we can make it work.”

PLDT and Meralco have compatible and complementary network and business infrastructure elements such as fiber optic backbones, power poles and business offices. E-Meralco Ventures, Inc. operates a fiber optic network of over 1,000 kilometers in and around the National Capital Region and in six surrounding provinces, providing leased line services, metro Ethernet connections, and disaster recovery services.

Pangilinan said this could provide PLDT expanded network diversity, backroom assets in data management and information technology domain knowledge may also be pooled and maximized.

Pangilinan, PLDT president Napoleon Nazareno and board member Ray Espinosa were elected to the Meralco board as members. To close the circle of cooperation between both companies, PLDT has appointed Meralco chairman, Manolo Lopez, to the advisory board of the phone giant.