Globe extends tender offer period for Bayan notes

Posted at 11/21/12 5:01 PM

MANILA, Philippines - Globe Telecom Inc. extended the early tender date of its offer to purchase the 13.5% senior notes issued by Bayan Telecommunications Inc. to November 27 (Tuesday).

The tender offer is part of Globe's plan to acquire Bayan by purchasing all of 13.5% senior notes originally due 2006.

"Globe has extended the Early Tender Date from 5:00 p.m., New York City time, on November 19, 2012, to 11:59 p.m., New York City time, on November 27, 2012," Globe said. 

The tender offer will proceed if creditors holding some 70% of the debt agree to sell to Globe. If this happens, Globe will become the major creditor of Bayan.

Based on the preliminary results of the tender offer, Globe said notes, which represent 85% of the aggregate remaining principal amount of notes had been tendered and not withdrawn. Globe estimates Bayan's aggregate remaining principal amount  of the tendered notes is $184.5 million.

Around 82% of the aggregate remaining principal amount of the loans appears to have been tendered. Approximately 64% of the aggregate remaining principal amount of Radio Communications of the Philippines, Inc.'s debt also appears to have been tendered. The offer to purchase the loans and RCPI debt expires on December 4, 2012.

Globe is offering to pay to each holder $280 for every $1,000 remaining principal amount of notes if the acceptance level is less than 75%; $290 if the acceptance level is equal to or greater than 75% but less than 80%; $300 if the acceptance level is equal to or greater than 80% but is less than 85%; and $310 if the acceptance level is equal to or greater than 85%.

"The tender offer is representative of Globe's belief in the value of (Bayan) as a nationally enfranchised entity... Potentially combining Globe's assets and capabilities with BTI through collaborative business efforts will enable both companies to become more competitive and help accelerate the completion of Bayan's rehabilitation," Globe chief financial officer Albert de Larrazabal earlier said. 

Bayan recently entered into a co-use agreement with Globe, which was approved by the National Telecommunications Commission. Under the deal, Globe and Bayan can jointly use the latter's 1800 megahertz frequency band. 

Bayan, which is under rehabilitation, had previously received buyout offers from Philippine Long Distance Telephone Co. (PLDT) and Globe but discussions did not prosper.

Creditors of Bayan, whose debt reportedly reached $325 million before it was placed under rehabilitation, include Development Bank of the Philippines, the United Coconut Planters Bank, and the Land Bank of the Philippines.

Bondholders of the Lopez firm, meanwhile, include Avenue Asia Investments LP, Avenue Asia International, Ltd., Avenue Asia Special Situations Fund II LP, Avenue Asia Capital Partners LP, and Van Eck Global Opportunity Masterfund Ltd.

Bayan has a fixed-line and data business segments, offered to clients located in Metro Manila and select provinces.