PLDT sells satellite business
by Lenie Lectura, BusinessMirror | 11/08/2009 10:27 PM
Printer-friendly version | 
Send to friend | 
Share your views
MANILA - In a surprise move, telecom giant Philippine Long Distance Telephone Co. (PLDT) sold its subsidiary Mabuhay Satellite Corp. (MSC), the first Philippine entity to own and operate a communications satellite, to Asia Broadcast Holdings Ltd. (ABS), a Bermuda company engaged in the satellite business.
Although no details were divulged why PLDT is letting go of its satellite business as well as the value of the transaction, MSC chief executive officer Gabriel Pimentel said “this will not only ensure future continuity of Mabuhay’s Subic Space Center but will thrust it into growth as this facility is further expanded to support ABS growing satellite operations needs.”
The MSC space center is a satellite communications facility providing full satellite operations, payload and client monitoring, tracking, telemetry and control services for Aguila-2 satellite. MSC successfully launched Agila-2 on August 20, 1997 which commenced commercial operations on January 1, 1998. Since then, MSC has successfully positioned itself in the competitive international satellite communications arena by offering video, Internet protocol and telecommunications solutions for clients in Asia and in North America.
“ABS, while one of the youngest satellite operators in Asia, has been very progressive with its recent procurement of ABS1-A, and ABS-2 satellites as part of its fleet expansion. We are happy with this acquisition, which leverages the satellite operations capabilities developed through the years by Mabuhay Satellite,” said Pimentel.
Under the terms of the sale, ABS will maintain all of Mabuhay’s operations in the Philippines and the staff will be integrated within the ABS team, said company chief executive officer Tom Choi.
“We are very pleased and excited to work with MSC to conclude this transaction. The acquisition of MSC is very strategic for ABS because of the many synergies it creates in combining MCS’ range of applications, operational expertise and business relationships with our future growth and long-term objectives. We feel that this is a perfect complimentary marriage of the two companies,” said Choi.
MSC and ABS signed several agreements—including the sale and purchase of the entire MSC business, on October 22. However, these agreements will be effective upon the issuance of the necessary regulatory US government approvals.
“The transactions between MSC and ABS involve the wholesale lease by ABS of the Agila-2 satellite from MSC and—upon satisfaction of various conditions precedent—the purchase of ABS by the business of MSC. Until such time that the conditions precedent under the relevant agreements are met, MSC president Gabriel Pimentel shall continue to operate and manage the business on behalf of ABS under an operations and management agreement,” said PLDT in a statement.
PLDT was earlier in talks with two companies engaged in satellite business after it found that its former partner has filed for bankruptcy.
Bermuda-based ProtoStar Ltd. was supposed to provide service for PLDT on five C-band transponders on its ProtoStar 1 satellite from 2011 to 2017. ProtoStar has already received from PLDT some $27.5 million as prio-rity deposit under the agreement.
But news broke out that ProtoStar and its affiliates ProtoStar Satellite Systems Inc., ProtoStar I Ltd., ProtoStar II Ltd., ProtoStar Development Ltd. and ProtoStar Asia Pte. Ltd. each filed for voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code. The cases are pending before the US Bankruptcy Court in the District of Delaware.
This prompted PLDT to look for other partners.
The country’s largest phone firm said it has already taken the necessary steps to make sure it gets its due. For one, PLDT said it will be represented by a counsel in the bankruptcy proceedings. The phone company will “actively participate” in such proceedings to protect its rights and interests as a creditor of ProtoStar.
Comments