Buckling to political pressures, ABS-CBN Corporation and TV5 Network have decided to delay the closing of their agreement which would allow ABS-CBN to acquire up to 49.92 percent of TV5.
“To address the issues which have been raised by certain legislators and the National Telecommunications Commission on the proposed investment by ABS-CBN for a minority interest in TV5, ABS-CBN and TV5 have agreed to a pause in their closing preparations,” the networs said in a statement.
They explained that, “This pause will give the space for both media organizations to respond to the issues, and accommodate any relevant changes to the terms.”
“Both ABS-CBN and TV5 believe that an agreement between the two media companies will have a favorable impact on Philippine media, and on free-to-air television—which remains the most affordable and extensive source of entertainment and public service to Filipinos,” the statement added.
Last August 11, ABS-CBN and TV5 executed an Investment Agreement allowing ABS CBN to acquire 6.46 million new common shares of TV5, representing 34.99 percent of its total voting and outstanding capital stock, for P2.16 billion.
Simultaneously with the execution of the Investment Agreement, the parties will execute a Convertible Note Agreement under which ABS-CBN will invest P1.84 billion in the Convertible Notes to be issued by TV5.
The Convertible Note will allow ABS-CBN to acquire additional primary common shares of TV5 after 8 years from its issuance, increasing its equity in TV5 to no more than 49.92 percent of the outstanding capital stock of TV5.
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 to enhance its content and programming and public service offerings.
Aside from this, TV5’s Cignal Cable Corporation also signed an agreement to invest in ABS-CBN’s Sky Cable Corporation.
Cignal entered into an agreement with Sky Vision Corp., ABS-CBN Corp. and Lopez Inc. to acquire a 38.88 percent stake in Sky Cable for P2.86 billion.