FOR IMMEDIATE RELEASE June 4, 1999 |
NTT to Purchase Stake in PLDT |
Nippon Telegraph and Telephone Corporation (NTT) today reached agreement in principle with Philippine Long Distance Telephone Company (PLDT), the Philippines´largest telecommunications carrier, and First Pacific Company Limited (FPC), PLDT's major shareholder, to acquire a 15% stake in PLDT. Pursuant to the agreement in principle, NTT would exchange all of its shares in Smart Communications, Inc. (Smart), a telecom carrier in the Philippines in which NTT and FPC, through out its Philippines affiliate, Metro Pacific are the major shareholders, into new common shares of PLDT. NTT´s total investment in Smart amounts to about 13.1 billion pesos (approximately US$372 million, or ¥40.0 billion) representing about 37% of Smart´s total outstanding common shares. PLDT would issue new PLDT common shares to Smart´s shareholders representing 22.5% of PLDT´s common share capital after the exchange of shares. NTT´s interest in SMART will account for 7.8% of the enlarged share capital of PLDT. NTT would also simultaneously subscribe for newly issued PLDT common shares for approximately 14.7 billion pesos (approximately US$386 million or ¥47.5 billion at $1 = 38 pesos = ¥123) representing 7.2% of enlarged common share capital of PLDT. Also, under today´s agreement, the FPC group's entire shareholding in Smart, equal to 56% of outstanding stock will be converted into new common shares of PLDT. As a result of the investment, NTT would have the right to appoint two directors to an enlarged board of 13 directors. The agreement in principle is subject to definitive documentation, which the three companies are now negotiating. The closing of the transaction will also be subject to certain corporate, shareholders and regulatory approvals and other conditions precedent. The Philippines accounts for the fourth largest share of international telecom traffic originating in Japan, following the United States, China and Korea, while Japan accounts for the second largest share of the Philippine's outbound traffic, following only the United States. As such, the Philippines represents a key component of NTT's current and future international business. PLDT, the Philippines´ largest carrier, provides local, long-distance, international communications services in the Philippines, commands a 60% share of the nation's fixed-line market (subscriber base) and a 68% share of the international services market. PLDT is also a leading participant in major undersea cable projects. A stake in PLDT will give NTT a strong foothold for further developing its worldwide Arcstar-brand telecom services and strengthening its capabilities for developing international business in the Philippines and the Asia region. |
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For further information, please contact:
Norihiko Ohkubo or Megumi Inaji |
 NTT NEWS RELEASE |