ABS-CBN Corp. yesterday said its creditors have agreed to halt the contractual payment of its debt following Congress’ denial of its franchise renewal last year.
In a disclosure to the Philippine Stock Exchange, ABS-CBN said the existing lenders of the company agreed yesterday to make its standstill agreement effective on May 31, 2021.
“The existing lenders of the company today agreed to make its standstill agreement with the company effective, i.e., not to declare any event of default or to exercise any rights or remedies under existing loan agreements, after compliance by the Company with the lenders’ condition of the creation of a mortgage and security interest over certain assets of the company,” ABS-CBN said.
As of end-September 2020, ABS-CBN’s outstanding term loans stood at P27.04 billion, based on the company’s financial report.
ABS-CBN had loans of P11.35 billion with UnionBank and P10 billion with Bank of the Philippine Islands.
The broadcast firm reported a net loss of P7.3 billion in the first nine months of 2020, compared with a P2.3 billion net income in the previous year, due to the shutdown of its several businesses after Congress denied its renewal for a 25-year franchise.
In January to September of 2020, ABS-CBN generated consolidated revenues of P17 billion from advertising and consumer sales, 46.8 percent lower year-on-year. Advertising revenues suffered a sharp decline in the second quarter of 2020 following the National Telecommunications Commission’s order to stop its broadcast last May.
ABS-CBN shows have been airing via A2Z channel 11 following its blocktime agreement with Zoe Broadcasting Network.
The blocktime agreement came three months after the Congress rejected ABS-CBN’s franchise renewal that resulted in the retrenchment of nearly 5,000 employees.