First Pacific bought PLDT for $750M in the 1998 crisis firesale and turned it around

In November 1998, in the middle of the Asian financial crisis, Hong Kong-based First Pacific paid US$750 million for a 17.2% stake in Philippine Long Distance Telephone (PLDT), a 27.4% voting interest that gave it control of the country's dominant telecom. The deal was the biggest takeover in Philippine history.

The purchase looked reckless at first. Forbes reported in early 2000 that chairman Manuel Pangilinan, who moved into PLDT's president office, was asking himself "What have we done?", with the turnaround expected to take years.

The bet paid off as the Philippines' mobile market exploded. In the first half of 2004 PLDT posted a net profit of 12 billion pesos (US$215 million), up 573% from 1.8 billion pesos a year earlier, more than its full-year 2003 profit, led by Smart Communications whose first-half profit reached 11.6 billion pesos.

PLDT's first-half 2004 net profit hit 12 billion pesos, up 573% from a year earlier, versus 11.2 billion pesos for all of 2003.

First Pacific bought at the bottom, when rivals were fleeing Asian assets rather than buying them.

It took management control, not a passive stake, so it could fix operations directly.

PLDT owned the country's fixed-line network and Smart's fast-growing mobile business.

Pangilinan personally ran the restructuring instead of delegating it.

In a region-wide panic, buying the dominant local franchise with cash at a distressed price can work, if you are prepared to run it and absorb years of restructuring.

Pangilinan stayed at PLDT's helm through the recovery; the company remained the Philippines' dominant telecom and one of Southeast Asia's largest carriers. First Pacific, forced to sell assets elsewhere during the crisis, came through with PLDT as its crown jewel. The deal became a textbook example of buying during a panic rather than after it.