Globe gets 92.9% of Bayan debt at end of tender offer

Globe Telecom has secured a foothold in financially distressed Bayan Telecommunications Inc. with the completion of its tender offer for the Lopez-led firm’s shares.

In a statement issued at the conclusion of its tender offer, Globe said 92.9 percent of the remaining principal amount of Bayan’s 13.5-percent senior notes originally due in 2006 were sold by creditors to the Ayala-led telecommunications unit.

“All of the conditions to the tender offer, as set forth in Globe’s amended and restated offer to purchase, have been satisfied or waived,” Globe said on Thursday.

Based on its tender offer conditions, Globe will pay Bayan creditors $310 for every $1,000 worth of notes, if tendered on or before the tender offer date of Dec. 11. For creditors that tendered their notes between Dec. 11 and the deadline of Dec. 18, Globe will pay $307.50 for every $1,000.

The settlement date was set for Dec. 21, New York City time, the Globe statement said. Globe previously appointed Citigroup Global Markets Inc. to serve as dealer-manager for the transaction.

Bayan has been under corporate rehabilitation since 2003. The current court-supervised plan would have seen the Lopez-led company exiting rehabilitation in 2023. Globe said that after the tender offer has been completed, Bayan would likely exit rehabilitation much earlier than expected.

Globe officials earlier said the tender offer for Bayan’s debts was part of plans to eventually acquire an equity stake in the smaller firm. It also follows a recently approved co-use deal for Bayan’s idle radio frequencies which, if left unused, may be recalled by state regulators.

“Potentially combining Globe’s assets and capabilities with [Bayan] through collaborative business efforts will enable both companies to become more competitive and help accelerate the completion of Bayan’s rehabilitation,” Globe said in an earlier statement.

The National Telecommunications Commission (NTC) recently approved Globe’s application for the joint use by Globe and Bayan of the frequencies 1750-1760MHz/1845-1855MHz assigned to the Lopez telecommunications firm.

The joint-use agreement will allow Globe to address increasing demand for voice, SMS and mobile data services and allow Bayan to offer its mobile telecommunications services to customers.