AUGUST 12, 2006 (STAR) By Mary Ann Ll. Reyes - The Presidential Commission on Good Government (PCGG) is set to go after at least P4.3 billion in dividends issued by the Philippine Long Distance Telephone Co. (PLDT) to the Cojuangcos, particularly Prime Holdings Inc. (PHI).

PHI owns 46.13 percent of Philippine Telecommunications Investment Corp. (PTIC), which in turn owns 14 percent of PLDT. The Supreme Court has ordered the forfeiture of the PTIC shares held by PHI in favor of government, and consequently, PHI’s 6.62-percent indirect holdings in PLDT.

PCGG commissioner Ricardo Abcede said in an interview that PTIC has received significant dividend declarations from PLDT of which around half or 46.13 percent should have been escrowed pending resolution of the ownership issue.

PTIC is owned 46.13 percent by PHI, the holding company of the family of businessman Antonio "Tonyboy" Cojuangco. The rest of PTIC was acquired many years back from PHI by the First Pacific group, which owns 24 percent of PLDT.

PTIC owns 14 percent of PLDT so that PHI indirectly has a 6.62-percent stake in PLDT.

The Supreme Court ruled last January that PHI was a dummy corporation of the late President Marcos. The High Tribunal denied a motion for reconsideration filed by the estate of Cojuangco and the Yuchengco group, which claims to have sold these shares to the Marcoses under duress.

PCGG estimates that the PHI PTIC shares held by PHI have a market value of P25 billion and is now looking at several ways of selling the shares to get "the highest price possible."

The P4 billion in cash and stock dividends which have been paid by PLDT to PHI 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 for 2006 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.

PCGG is looking at several modes of disposing of the PTIC shares, including a direct sale to a government financial institution, secondary offering, competitive public bidding, and negotiated sale to a strategic buyer.

"But as much as possible, we will sell the PTIC shares as a block and at a premium price than its current market value," Abcede said.

At least two groups have already expressed serious intentions of acquiring the PTIC shares. These are the First Pacific group which currently controls PTIC, as well as the Japanese NTT group that wants to increase its stake in PLDT by another six percent.

First Pacific managing director and CEO Manuel Pangilinan, also chairman of PLDT, earlier told the STAR that it makes sense for their group, being the majority owners, to acquire the remaining PTIC shares in order to consolidate their ownership of the company. "We are definitely making a big for it," he said.

Chief News Editor: Sol Jose Vanzi

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