ABS-CBN, TV5 "pause" investment agreement

ABS-CBN Corporation and TV5 Network, Inc. agree to hold the closure of their investment agreement, which was expected to be completed this month.

File photo: ABS-CBN and TV5 logos

To address the issues which have been raised by certain legislators and NTC

In a statement on Wednesday, the two major networks said this is "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."

The pause will also give both companies space to respond to the issues and accommodate changes to the terms, they added.

ABS-CBN and TV5 announced the PHP 2.16 billion investment agreement early this month. This will allow ABS-CBN to acquire 6.459 million new common shares in TV5, which represents 34.99 percent of the latter's total and outstanding capital stock.

The House committees on legislative franchises, and trade and industry started their investigation on the multi-billion peso deal on Wednesday. This was after House resolutions were earlier filed seeking to conduct an inquiry into the transaction between the two companies.

Some of the issues pointed out by lawmakers were the alleged foreign ownership of the Pangilinan-led firm and their block time agreement.

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 networks said.

Under the agreement, the companies will also execute a convertible note agreement to which ABS-CBN will invest in a convertible note with a face value of PHP 1.84 billion to be issued by TV5. This will increase ABS-CBN’s equity to no more than 49.92 percent.

Proceeds from these 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.

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.

During the Duterte administration, the House legislative franchises panel denied the renewal of ABS-CBN's franchise.

What do you guys think about this development?