ABS-CBN Corp. yesterday signed a deal to acquire 35 percent of TV5 Network Inc. for P2.16 billion, while selling stakes in Sky Cable Corp. to finance the deal.
ABS-CBN said it will acquire 6.46 million new primary common shares of TV5, which will reduce MediaQuest Holdings Inc.’s equity in TV5 to 64.79 percent from 99.67 percent stake prior to the transaction.
With this, MediaQuest, a wholly0owned subsidiary of PLDT Beneficial Trust Fund, will remain to be the controlling shareholder of TV5 and the two firms will continue to operate as separate entities.
The landmark deal comes after activities between the two groups have increased with more Kapamilya programs onboarded on TV5’s Kapatid Network.
“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,” said Carlo Katigbak, ABS-CBN president and chief executive officer.
ABS-CBN said it will also invest in a convertible note with a face value of P1.84 billion to be issued by TV5 which will allow ABS-CBN to increase its equity in TV5 up to 49.92 percent after eight years.
The proceeds will fund the capital expenditures and operating expenses of TV5 in pursuing the enhancements of its content and programming and public service offerings.
“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,” said Manuel Pangilinan, MediaQuest Holdings chairman.
In a separate disclosure, PLDT said its MediaQuest unit Cignal Cable Corp. will acquire 38.9 percent of Sky Cable Corp. for P2.86 billion.
The investment in Sky Cable by Cignal Cable is expected to benefit the former’s existing customer base consisting of over 300,000 cable subscribers and close to 350,000 broadband subscribers as of the end of June 2022.
Simultaneously, Sky Vision Corp. agreed to issue an exchangeable debt instrument to Cignal Cable with a face value of P4.39 billion.
The debt instrument gives Cignal Cable the option to acquire additional Sky Cable shares equivalent to 61.12 percent of the outstanding capital stock of Sky Cable after eight years.
Cignal Cable will also acquire a convertible note issued by Sky Cable with a face value of P250 million representing about 1.84 percent of outstanding capital stock.
The proceeds of the sale of the shares, the convertible note and the issuance of the debt instrument in the total amount of P7.5 billion will be used to repay certain obligations of ABS-CBN and Sky Vision and to fund the investment of ABS-CBN in TV5.
ePLDT, a subsidiary of PLDT Inc., will fund, through a loan extended to Cignal Cable, the P7.5 billion acquisition cost of Cignal Cable of the sale shares and the foregoing debt instruments.
ABS-CBN and MediaQuest expect the financial closing of the television and cable business deal within this month, subject to certain conditions.
