ABS-CBN, TV5 sign PHP 2.16 billion investment deal

Two major networks in the country are joining forces as ABS-CBN Corporation and TV5 Network, Inc. announced a PHP 2.16 billion investment agreement.

ABS-CBN, TV5

ABS-CBN and TV5 are joining forces through a multi-billion peso deal

In a disclosure on Thursday, the Lopez-led firm said the deal will allow ABS-CBN to acquire 6.459 million new common shares in TV5, which represents 34.99% of the latter’s total and outstanding capital stock.

Following this, MediaQuest group's equity in TV5 will be reduced to 64.79%, but it will remain as the controlling shareholder.

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, Mediaquest Holdings Chairman Manuel Pangilinan said.

As for ABC-CBN Chairman Mark Lopez, it presents a fantastic platform for us to achieve synergies in production content and talent management as well as maximizing our content delivery.

Both companies will also execute a convertible note agreement to which ABS-CBN will invest in a convertible note with a fave value of PHP1.84 billion to be issued by TV5.

This will allow the former, subject to regulatory approvals, to acquire additional common shares of the Pangilinan-led firm after 8 years from the issuance of the convertible note. This will increase ABS-CBN’s equity to no more than 49.92 percent.

Proceeds of the subscription and convertible note amounting to PHP 4 billion will be used to fund the capital expenditures and operating expenses of TV5 to enhance its content, programming, and public service offerings.

This transaction is clearly transformational for both companies and is envisaged to significantly enhance TV5's capability to deliver content and coverage to the Filipino public in the areas of entertainment, news, sports, and public services, the so-called Kapamilya network said.

It also noted this is consistent with the national policy of expanding the private sector's role of supporting efficient and reliable public services, which TV5 is expected to provide through its nationwide network to provide increased network coverage, especially in remote areas.

The transaction is expected to be completed within this month.

ABS-CBN has used block time leasing deals to air its shows on TV5 after it was ordered to stop broadcast operations in May 2020.

Congress under the Duterte administration denied the renewal of ABS-CBN's franchise.

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