Listed Digitel Telecommunications Philippines Inc. is increasing its authorized capital stock to accommodate the conversion of P16 billion worth of obligations into common shares by 2013 and 2014.
These obligations are in the form of zero coupon convertible bonds originally issued by Digitel and its subsidiaries to parent firm JG Summit Holdings Inc.
The debt paper formed part of the assets sold by JG Summit to Philippine Long Distance Telephone Co.
In a disclosure, Digitel said it would raise its capital stock to P25 billion from the current P9 billion.
The convertible bonds accounted for a significant portion of the P69.1 billion paid by PLDT to acquire a 51-percent stake in Digitel from the Gokongwei family holding firm JG Summit.
The bulk of the price paid by PLDT was used to pay the P34.1 billion intercompany advances made by JG Summit to Digitel which, for the larger part of the past decade, had been losing money.
Only P5.2 billion went to pay for the 3.27 million Digitel shares, or 51 percent of its total capital stock, held by JG Summit.
JG Summit had received as payment for its Digitel stake P69.1 billion worth of PLDT shares, priced at P2,500 each. The Gokongwei holding firm has already sold part of the PLDT stake it just obtained, diluting its holdings now to 8 percent from 12 percent, to 8 percent. The shares were sold back to PLDT major shareholders First Pacific Co. Ltd of Hong Kong and NTT DoCoMo of Japan. Paolo G. Montecillo