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Friday, March 29, 2024

Senate quizzes PT&T’s multibillion rehab bid

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“Roughly about 10 billion [in liabilities] and roughly about P2 billion [in assets]”, revealed by Philippine Telegraph and Telephone Corp. president and chief executive officer James G. Velasquez about his company’s financial conditions.

This after Senator Francis “Chiz” G. Escudero asked Velasquez for the third time “how much was PT&T’s total liabilities and assets? [Magkano po ba iyong total na utang at magkano po ba iyong asset?]” during the Senate explanatory hearing on the third telco in the country.

Escudero’s PT&T inquiry came from its promise to roll out over P250 billion in five years and to spend P150 billion in the first year despite the company being engulfed by the financial crisis and its rehabilitation plan case still pending before the Supreme Court.

Last May 19, 2017, the Court of Appeals reversed the decision of the Regional Trial Court acting as PT&T’s rehabilitation court which gave PT&T an order to undergo corporate rehabilitation by approving its rehabilitation plan instead of ordering its liquidation to settle its massive obligations. 

The CA found the rehabilitation plan “unilateral and detrimental to its creditors and the public.” 

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That decision was elevated to the Supreme Court but was dismissed for being filed beyond the reglementary period.  

Just last June 14, 2018, the PT&T filed a motion for reconsideration before the SC arguing that they filed within the required period.

Velasquez, however, claimed that as far as the capability of the PT&T and their creditors are concerned, they “are well on our way to exit” [their corporate rehabilitation status].

The Financial Rehabilitation and Insolvency Act of 2010 allows financially troubled corporations to undergo rehabilitation while suspending payments to creditors.  However, the same law also provides for liquidation of the corporation to settle creditors if rehabilitation is no longer possible. 

In its June 30, 2017 annual report, PT&T reported more than P10 billion in total liabilities with only P759 million in total assets. In addition, PT&T only reported P4.8 million in cash as of reporting cut-off. 

With PT&T’s failure in securing the third telco spot, Escudero questioned not only PT&T’s financial status but also its capability of sourcing P250 billion required of the third telco.  

Escudero also looked into the possible consequences to PT&T’s creditors if it fails to get the third telco award right after PT&T CEO Velasquez informed him that their creditors agreed to a debt-to-equity swap.

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