Government to earn P5B in accumulated PLDT dividends

By Mary Ann Ll. Reyes
The Philippine Star 09/06/2006The government stands to earn over P5 billion in accrued dividends from the Philippine Long Distance Telephone Co. (PLDT) resulting from its part ownership of Philippine Telecommunications Investment Corp. (PTIC), which, in turn, owns 14 percent of the telecoms giant.

Presidential Commission on Good Government (PCGG) commissioner Ricardo Abcede told The STAR that they have just been informed that PLDT has put in escrow billions of pesos in dividends accruing to PTIC but were not released due to an ownership battle. The amount is expected to easily exceed P5 billion in cash, excluding interests earned.

That ownership battle may be finally put to rest after the Supreme Court ordered the forfeiture in favor of government of 46.13 percent of PTIC (around 115,000 shares) held by Prime Holdings Inc. (PHI), a company owned by the family of businessman Antonio "Tonyboy" Cojuangco but which the High Tribunal declared as a mere dummy corporation for the Marcoses.

PHI owns 46.13 percent of PTI which, in turn, owns 14 percent of PLDT. Thus, PHI has 6.62 percent indirect holdings in PLDT. The rest of PHI is owned by the First Pacific group, which controls PLDT.

The estate of the late Ramon Cojuangco (Tonyboy’s father) filed a motion for reconsideration of the SC ruling which was denied. It is now asking for leave of court to file a second motion for reconsideration, which if denied would make the decision of forfeiture final and executory.

The PHI stake in PTIC is estimated to have a market value of around P25 billion. The PCGG plans to immediately dispose off these reconveyed shares and among the parties that have expressed interests in acquiring these shares is First Pacific.

First Pacific chief executive and PLDT chairman Manuel Pangilinan said the acquisition of the PHI shares would consolidate First Pacific’s ownership of PTIC.

Meanwhile, Japan’s biggest telecommunications company NTT – which wants to increase its stake in PLDT from the current 14 percent to 20 percent – also wants to make a bid for the PHI shares in PTIC. NTT wireline subsidiary NTT Communications and wireless operator DoCoMo own seven percent each in PLDT, or a combined 14 percent. Under an agreement with First Pacific, the NTT group can own not more than 20 percent of PLDT to ensure First Pacific’s control of PLDT with its 24 percent shareholdings.

The P4 billion in cash and stock dividends which should have been paid by PLDT to PHI (then owned by the Cojuangcos) represent dividend declarations made in 2005 and 2006 for PLDT’s earnings in 2004 and 2005. Abcede said around P3.3 billion represent equity in net earnings while P672 million constitute cash dividends declared in 2005 and P336 million also in cash dividends declared by PLDT.

These cash dividends would include declarations made in March, May and November 2005 and February 2006 by PLDT to its shareholders.

The cash dividends representing 2005 earnings of PLDT do not include the company’s recent declaration of an interim dividend of P50 per share, with record date of Aug. 21 and payment date of Sept. 21. The dividend declaration is based on a 60 percent payout of core earnings per share and PLDT expects to pay out a total of P9.1 billion of common dividends for this dividend declaration alone.

It will be recalled that 2005 was the first time in many years that PLDT declared dividends for its common shareholders.

Abcede said they are still awaiting for PLDT’s final computation of the dividends as well as interests earned by PHI which are now supposed to go to government by virtue of the SC ruling.

 

http://www.philstar.com/philstar/NEWS200609060710.htm