ABS-CBN sets stage for P6-billion infusion
Media giant ABS-CBN Corp. is set to seek shareholder approval for plans to triple its authorized capital to P4.5 billion. This paves the way for a P6-billion equity infusion that will bring in a new major investor and help the financially bleeding company pare down debt.
In a disclosure, ABS-CBN said the proposed capital structure would consist of 4.24 billion common shares with a par value of P1 each and 1.3 billion preferred shares with a par value of 20 centavos each.
This compares with its existing authorized capital stock of P1.5 billion, comprising 1.3 billion common shares and one billion preferred shares.
ABS-CBN said the amended proposal will be presented to shareholders at a special meeting on Sept. 30, alongside changes to its articles of incorporation and the election of two additional directors.
The capital hike would pave the way for ABS-CBN to issue new shares under subscription agreements worth P6 billion signed in August.
Under the deal, Filipino-owned private investment holding firm I&C Holdings Corp. has committed P3.5 billion.
Meanwhile, Crème Investment Corp., Mantes Corp. and Presta Holdings Company Inc. will subscribe to an aggregate of P2.2 billion.
Lopez Inc. will put in another P300 million.
ABS-CBN said proceeds would be used to meet working capital requirements, settle past-due liabilities, pare down outstanding bank debt and fund other general corporate purposes. The shares will be issued at P3.65 per share.
But the transaction would also significantly reshape ABS-CBN’s ownership structure.
I&C would emerge with a 27.06-percent stake while Lopez Inc.’s interest would fall to 44.35 percent from 78.4 percent.
Crème, Mantes and Presta would hold 5.94 percent, 5.93 percent and 5.15 percent, respectively.
ABS-CBN said its public float would likewise be diluted, although the company would remain fully Filipino-owned.
Changes to the board are also in the works, with ABS-CBN seeking to expand it to nine seats from seven.
Socorro “Cory” Vidanes and Roberto Barreiro have been nominated for the two new seats. These would be created upon Securities and Exchange Commission (SEC) approval of the amendment to the company’s articles of incorporation.
Following the Sept. 30 stockholders’ meeting, ABS-CBN intends to file its amended articles with the SEC in early October.
The equity transaction can close only after the SEC approves the capital increase. ABS-CBN expects to get the regulator’s nod by early November.
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