San Miguel to complete acquisition of Extelcom in 'next few months'

MANILA, Philippines - San Miguel Corp. (SMC) is looking to complete its purchase of Express Telecommunications Co. Inc. in the next few months after it signed an acquisition agreement. Under the agreement, the seller – led by businessman Roberto Ongpin and UK-based fund Ashmore Investment Management Ltd. – “undertakes to clean up the company before [San Miguel] comes in," Ramon S. Ang, San Miguel Corp., president, said. The Ashmore-Onpin group is buying shares from the creditors of Extelcom, which is currently under corporate rehabilitation with a total outstanding debt of P9.017 billion. With the acquisition, San Miguel will end up as Extelcom’s largest shareholder. The company has entered a joint venture with Qatar Telecom. Extelcom is eyeing to spend $1.3 billion to build a network of 5,365 base stations over 10 years, a move that will support its ambition to become a market leader in the country, the telco earlier said in a statement. To fund its expansion, Extelcom said it will be tapping a combination of debt and equity to bankroll its capital spending. With its market re-entry, a move seen to challenge mobile players Smart Communications Inc., Globe Telecom Inc., and Sun Cellular, Extelcom said it believes that it can bring in significant benefits for consumers and industries and the general economy once it launches its mobile services. “The company’s re-entry will give the Filipino consumers more choices," said Luisito Sapiera, officer-in-charge at Extelcom. Based on its application with the NTC, Extelcom’s roll-out will focus on both coverage and quality. It will establish a network with broad population and geographic coverage in the first five years. The company is a joint venture between Lopez-led Bayan Telecommunications, Inc., Scott Sproule Cellular and Digital Excel Development, and Mayon Holdings Inc. Bayan is opposing a move by Trans Digital Excel Inc., the creditor-turned-shareholder, of Extelcom to sell its shares to San Miguel. Besides Extelcom, San Miguel, through wholly-owned subsidiary, Vega Telecom, has acquired a 32.7-percent stake in listed Liberty Telecom for P1.88 billion. Liberty is also under rehabilitation. The conglomerate is seeking to acquire as much as half of Liberty, seen to be merged with Extelcom. Previously, Liberty said it needs P7.15 billion in fresh capital to generate revenue by expanding its service capacity in the next decade. Ang also said that San Miguel and Liberty are in talks with various equipment suppliers on how to operate its telecom business. The executive has earlier said that the company is eyeing to use power lines of Manila Electric Co., whose major shareholders include San Miguel, to offer internet broadband services. - GMANews.TV