ABS-CBN Corp. and TV5 Network Inc. on Thursday, August 11, 2022 announced the execution of an Investment Agreement that will allow ABS-CBN to acquire 6,459,393 primary (new) common shares in TV5 representing 34.99 percent of the total voting and outstanding capital stock of TV5 for a total subscription price of P2.16 billion.
The landmark deal represents a comeback and victory of sorts for ABS-CBN which, under the just concluded Duterte administration, had gone off the air after the House committee on legislative franchises rejected the bills seeking to grant the network a fresh franchise on July 10, 2020. The network’s 25-year franchise had been valid only until May 4 of that year.
In a disclosure to the Philippine Stock Exchange, ABS-CBN said the agreement will result in the reduction of MediaQuest group’s equity in TV5 to 64.79 percent of the voting and outstanding capital stock.
Simultaneously, the parties will execute a Convertible Note Agreement that will allow ABS-CBN to increase its equity to 49.92 percent of the outstanding capital stock of TV5.
Under the agreement, ABS-CBN would invest in a Convertible Note with a face value of P1.84 billion to be issued by TV5 that will allow ABS-CBN, following regulatory approvals, to acquire more primary common shares of TV5 after eight years from the issuance of the Convertible Note.
The proceeds of the subscription in the primary common shares and the Convertible Note in the total amount of P4 billion will fund the capital expenditures and operating expenses of TV5 as it seeks to enhance its content and programming and public service offerings.
The transaction is expected to be completed this month.
Manuel V. Pangilinan, chairman of Mediaquest Holdings, said: “We welcome the entry and investment of ABS-CBN in TV5, as ABS-CBN has always been the leading developer and provider of Filipino-related entertainment content not only in the Philippines but overseas as well. Our companies have always had these cherished values of providing top and quality programs in the service of the Filipino people, and together we believe we can achieve this in greater measure and success.”
Mark Lopez, chairman of ABS-CBN, said the partnership was an opportunity to help TV5 grow and strengthen its free to air network.
“For ABS, it presents a fantastic platform for us to achieve synergies in production content and talent management as well as maximizing our content delivery,” Lopez said.
Carlo Katigbak, president and chief executive officer of ABS-CBN, added: “In partnership with TV5, we look forward to reaching viewers both on owned platforms and through other broadcast partners, thereby enriching the Philippine creative industry. We hope the industry evolves from being highly competitive to increasingly collaborative, which benefits all stakeholders in the long run.”
The landmark deal comes after activities between the two groups have increased with more Kapamilya programs onboarded on TV5’s Kapatid Network.
Following the closure of its free-to-air broadcasting operations, including its radio stations in May 2020, ABS-CBN entered into blocktime deals with other media networks, Zoe Broadcasting Network and TV5, to enable some of its shows to return to free TV.
Cable TV
On Thursday, ABS-CBN said its board of directors had also approved the sale by ABS-CBN Corp. of 460,824,978 shares in Sky Cable Corp. for P2.465 billion to Pangilinan’s Cignal Cable Corp. (formerly: Dakila Cable TV Corp.).
“ABS-CBN, together with other stockholders of Sky Cable, Lopez Inc. and Sky Vision Corp., agreed to sell their shares in Sky Cable to Cignal Cable Corp. (formerly: Dakila Cable TV Corp.) representing 38.88 percent of the outstanding capital stock of Sky Cable,” ABS-CBN said in a separate disclosure.
Sky Vision also agreed to issue an eight-year Exchangeable Debt Instrument to Cignal Cable in the principal amount of P4.388 billion, exchangeable to 841,219,527 shares in Sky Cable representing 61.12 percent of Sky Cable’s outstanding capital stock, subject to obtaining regulatory approvals.
Sky Vision would use the proceeds from the issuance of the Exchangeable Debt Instrument to settle its obligations, including its obligations to ABS-CBN, amounting to P1.634 billion. (CTL with PR)