Lopez group considers folding in BayanTel with ABS-CBN
The Lopez group is looking at folding in its telecommunications arm Bayan Telecommunications Holdings Corp. (BayanTel) into media unit ABS-CBN Broadcasting Corp. in an effort to realize better synergies between the two companies, the family patriarch said last week.
Benpres Holdings Corp. chairman emeritus Oscar Lopez said the plan for convergence is being spearheaded by ABS-CBN chairman and chief executive officer Eugenio L. Lopez III. But before this is realized, he said the company should first resolve the court-mandated restructuring program imposed six years ago.
“In the next few months we will try to resolve this and try to consolidate BayanTel into the ABS-CBN framework,” the elder Lopez said.
Benpres, the listed flagship holding company for the Lopez group’s energy, media and telecommunications businesses, owns a majority stake in BayanTel together with privately held Lopez Inc. Benpres also controls a 57-percent stake in ABS-CBN.
While operations of both firms are distinct for now, ABS-CBN investor relations head Charles Gamo said ABS-CBN and BayanTel are already “collaborating” even without the formal consolidation.
“BayanTel advertises in ABS-CBN because of its wider reach. [It] might also be able to offer our content,” Gamo said in a separate interview.
He said the merging of BayanTel and ABS-CBN is “not farfetched” although he declined to provide additional details.
“Within the [Lopez] group, the related businesses are media and communications,” Gamo said. “For now, BayanTel is under a court-mandated rehabilitation. That will have to run its course.”
It also uncertain as to how BayanTel’s debt burden will affect the balance sheet of ABS-CBN, a profitable company which is even forecasting “significant” double-digit growth this year from P1.7 billion in 2009.
At the end of 2009, BayanTel said it paid a total of P1.42 billion for both principal and interest obligations. This brings the company’s debt payments to P5.92 billion since 2004.
As part of the rehabilitation plan approved in 2004 by the regional trial court in Pasig City, the company’s total debt was set at $325 million to be paid over a period of 19 years. There are also pending appeals from unsecured creditors seeking to increase this amount to $471 million which will be paid in 12 years.
Bayan’s first-quarter net revenues declined 7 percent to P1.522 billion compared with the same period in 2009. The company’s data business, which accounts for half of total revenues and includes direct subscriber line and corporate date services, were “slightly” lower during the period.
