REPUBLIC OF THE PHILIPPINES NATIONAL CAPITAL JUDICIAL REGION REGIONAL TRIAL COURT BRANCH 66, MAKATI CITY IN THE MATTER OF THE CORPORATE REHABILITATION AND SUSPENSION OF PAYMENTS OF THE RETELCOM GROUP OF COMPANIES PURSUANT TO THE RULES OF PROCEDURE ON CORPORATE REHABILITATION (A.M. No. 00-8-10-SC) SP. PROC. No. M-6853 REPUBLIC TELECOMMUNICATIONS HOLDINGS co, PHILIPPINES TELEGRAPH & TELEPHONE CORP., PHILIPPINE WIRELESS INC, CAPITOL WIRELESS, INC, AND WAVENET PHILIPPINES, ING., Petitioners. x ORDER Before this Court is a Manifestation dated July 27, 2018 filed by the petitioner PT&T through counsel with prayer to take note of the manifestations and to consider the rehabilitation proceedings deemed terminated subject to the accomplishment by PT&T of the courses of action based on the time table that they submitted. It is alleged by PT&T that this Court and that of the SEC, was informed that they have secured a new investor- Menlo Capital Corporation, who acquired a total of 560,00,00 of its listed common shares; that Menlo has taken over the management control of PT&T; that PT&T made a formal request to the PSE for the lifting of suspension of trading and has submitted its audited financial statement with SEC and BIR prelude to the lifting of the suspension of trading in the stock exchange and for the increase of its authorized capital stock. PT&T also asserts that they are talking to foreign corporations, mostly in the telecommunications industry, to form strategic partnership with the aim of becoming a new major player in the domestic (Philippines) market and possibly of being selected as the Third Telco under the program of the Government to break the duopoly of PLDT and Globe Telecom. It is asserted likewise by PT&T, that these events clearly manifest the steady and continuous implementation of the rehabilitation plan approved by this Court by PT&T’s new investor, Menlo, With regards to the implementation of other provisions of the approved rehabilitation plan, PT&T submitted the following courses of action and their date of completion, to wit: COU! FACTIONTOBETAKEN | _ TIMETABLE PT&T will conduct a__Stockholder’s | September 7, 2018 fserial, cumulative, Sonvertible and redeemable preferred ‘ares and implementing the debt-to- Pan conversion to pay the debts of | PT&T to increase its authorized capital Stock to Php10,187,150,000.00 | seesisting of 1,387,150,000 common | res at Php1.00 par value and 7,500,000 serial» cumulative convertible redeemable preferred shares at P100.00 par value and 8,800,000,000 — serial_ redeemable Preferred shares at Php1.00 par value as provided under paragraph i3 of the rehabilitation plan. This increase is to satisfy more or less Php8Billion debts | of PT&T, | Implementation of PT&T’s Debt to | October 5, 2018 equity conversion. _| = Setdorgent of_statutory obligations of | Starting November 2018 to June 2020 ‘er i Foy iE —_ It is asseverated by PT&T, that once the schedule that they imposed on themselves are accomplished, all the provisions of the rehabilitation plan approved’ by ‘this: Court would be deemed successfully implemented. PT&T maintains that being removed from the on-going rehabilitation proceedings with the help of its new investor is significant and essential in its quest to be successfully selected as a Third Telco which is set sometime in September 2018. If selected, this would substantially benefit the creditors as far as the payment of the debts is concerned and this would likewise benefit the other petitioners in this case as well, with regards to the payment of their debts and the implementation of the rehabilitation plan and finally PT&T justified why it should be taken out first of the rehabilitation proceedings ahead of the other petitioners because of this unique opportunity that is available to PT&T. As soon as PT&T is removed from the rehabilitation, it will be able to strongly bid in the selection process of the Third Telco. The rehabilitation receiver, Atty. Lito Mondragon signified his concurrence as indicated in the Manifestation filed by PT&T before this Court. It is apparent from the submissions of the petitioner PT&T that the schedule of their steps to be taken as well as the timetable indicated in their manifestation is in accordance with rehabilitation plan and is therefore in harmony with the avowed objective of corporate rehabilitation which is to assist a financially distressed corporation to again stand on its feet without prejudice to the interest of the creditors. It is without remiss to point out that the successful rehabilitation of PT&T is nearing its end and it is presented by their submissionsthat they ar, ‘ plan east a of the timeline within which to realize the provisions of the Plan to its logical « ttis proof of PT&T’s resolution to implement the rehabilitation Court belies alend This Court calls to mind what it has stated before, that this creditors and’. at the Fehabilitation of the petitioners will leave not only its Public in a wae nants but also its employees, stockholders, and the general opportunity to migetttet Position than if the petitioners were not afforied an Which is the in eu Stand on their feet. The information that petitioner PT&T, Investment vehicle, is vying to be selected as a Third Telco is proof tl . ie P&T and all parties concerned wilfatend in better position than they were Pwr a records show that while it is true that petitioners Retelcom, PT&T, CWI, "WI and Wavenet filed this petition jointly, each of the petitioners, however, has their divergent obligations to perform under the approved rehabilitation plan. Having Said that, each of the Petitioners should be considered separate and distinct in the implementation of approved rehabilitation plan. PT&T could confidently bid in the selection of the Third Telco. The status of PT&T being in the rehabilitation is a seeming hindrance that would absolutely diminish the chances of PT&T’s application to be selected as the Third Telco. This opportunity presents itself as a once in a lifetime chance for PT&T, not only in the come on the way of the petitioners and this Court should not be an obstacle to this. investment if this would lead into a successful recovery of a distressed Corporation. It is along this line that this Court is inclined, in the interest of the other petitioners, the creditors and other claimants, to order PT&T to be taken out of the rehabilitation proceedings ahead of the rest of the petitioners to give life to the notion that the debtor should be given sufficient opportunity to etna on its feet. It is the considered view of this Court that PT&T has the better Prospect to compete strongly in the selection process of the Third Telco if PT&T ig out of the rehabilitation Proceedings. Needless to say, PT&T. being separated from the rehabilitation proceedings would redound to the benefit of the other petitioners, the creditors and the claimants Nonetheless, this Court could not totally terminate the rehabilitation Proceedings of PT&T at this time, in view of the timeline that petitioners submitted which are still to be accomplished by them. It is however, clear that the Petitioners are in the right course leading to the path of successful rehabilitation WHEREFORE, premises considered, the _ rehabilitation Proceedings is deemed terminated subject to the accomplishment by petitioner PT&T of the remaining provisions of the approved rehabilitation plan based on the timeline submitted by the PT&T, which shall be as follows: {_ COURSES OF ACTION TO BE TAKEN TIMETABLE ] PT&T will conduct a Stockholder’s | September 7,2018 | [Meeting for the purpose of amending |ase its authorized capital 187,150,000.00 J | | shi serial cumulative | convertible redeemable preferred | shaves at P100.00 par value and |8:800,000,000 serial redeemable Preferred shares at Php1.00 par value as provided under paragraph i3 of the rehabilitation plan. This increase is to satisfy more or less Php8 Billion debts of PT&T. Implementation of PT&T’s Debt to | October 5, 2018 equity conversion. — 3020" Setiement of statutory obligations of | Starting November 2016 to June 2020 TST. Meanwhile, the Stay Order shall remain effective during the duration of this rehabilitation plan. The schedule above-stated should not be restrictive as to prevent PT&T from adjusting the same if circumstances warrant, provided PT&T shall immediately inform the Rehabilitation Receiver and the Court of the new date of its accomplishments. Further, PT&T is ordered to submit a consolidated status report to the Rehabilitation Receiver and to this Court at the end of each quarter as to the implementation of the schedule. SO ORDERED. August 6, 2018, City of Makati. ROSA fing Judge JOSELITO, ry