Media giants ABS-CBN Corp. and TV Network Inc. yesterday officially terminated their landmark investment deal amid issues raised by Congress and the telecom regulator but will continue their block-time and content partnerships.
In a disclosure at the stock exchange, ABS-CBN and TV5 said they have mutually agreed to terminate the investment agreement signed on August 10 covering the proposed acquisition by ABS-CBN of 34.99 percent equity interest in TV5 for P2.16 billion and the convertible note agreement covering the proposed subscription by ABS-CBN to a convertible note to be issued by TV5.
The deal termination came a week after the two media giants announced that they agreed to “pause” the closing date which was originally set by end of August this year to address the issues raised by Congress and the National Telecommunications Commission.
Last month, lawmakers sought a congressional inquiry into the purchase agreement between the two media firms saying that TV5 may have violated its legislative franchise for allowing ABS-CBN to air its shows and content through its network.
In a separate disclosure, ABS-CBN and its unit Sky Vision Corp., Lopez Inc. and MediaQuest Holdings Inc. unit Cignal Cable Corp. said they also mutually agreed to terminate the sale and purchase agreement dated August 10, 2022, covering the proposed acquisition by Cignal Cable of 38.88 percent equity interest in Sky Cable Corp. and the debt instruments agreement dated August 10, 2022, covering the proposed subscription by Cignal Cable to an exchangeable debt instrument to be issued by Sky Vision and the proposed acquisition by Cignal Cable of a convertible note issued by Sky Cable.
The termination of both contracts were formalized through a memorandum of agreement and also the media firms confirmed that they have not implemented any of the transactions covered by the investment agreement.
Meanwhile, ABS-CBN said the outcome of the deal has no impact on its current financials.
“As the previous disclosure mentioned that closing was still a period away and the termination occurred prior to closing, there is no impact on current financial condition, business or operations of the issuer,” ABS-CBN said.
The Lopez-owned firm added that the current content arrangements and partnerships continue to be in place and operations did not change as a result of the previous announcement.
Based on ABS-CBN’s first semester results, it continued to improve its financial performance with revenues up by P1.3 billion or 16.2 percent year-on-year, positive earnings before interest, tax, depreciation and amortization of P1.04 billion and reduction in net loss by 56.8 percent vs previous year, without these deals in place.
“We continue to service any obligations while expanding our reach through content partnerships, expand our digital business (Digital revenues were at P2.3 billion in 2021,
increasing by 48 percent from 2020) and grow our international efforts.” ABS-CBN said.
ABS-CBN has content partnership with other broadcast firm such as Zoe Broadcasting Inc. and GMA Network Inc. and also done deals for content distribution globally to digital platforms like over-the-top video streaming service Netflix, Vui, iwant and TFC.
