Key details
The P6.24 billion transaction, payable over a 10-year period, was disclosed to the Philippine Stock Exchange on Thursday.
The deal may also be reviewed by the Philippine Competition Commission, although insiders are hoping this may no longer be necessary.
There will also be an initial downpayment amount but the exact amount was not detailed in the filing.
Meanwhile, ABS-CBN plans to use the proceeds to pay down debts.
It had a total of P16.43 billion in interest-bearing loans (P11.84 billion for ABS-CBN and P4.47 billion for SkyCable) as of November 2024.
Big picture
This is the single-largest asset sale by ABS-CBN in the wake of its television broadcast shutdown that was orchestrated by President Duterte’s allies in Congress during the COVID-19 outbreak in 2020.
Despite heavy financial losses, CEO Carlo Katigbak swiftly pivoted, leading the company to sharpen its focus on content production and movies while renegotiating debt terms with lenders.
This helped steady operations although challenges still persist. To stay afloat, the company had conducted smaller asset sales of property, planes, and transmission gear.
What’s covered in the deal?
ABS-CBN, which began broadcast operations from the Quezon City site in 1968, is selling several buildings, including production facilities.
It will maintain a 1.4-hectare portion of the land, where the ELJ Communications Center, offices, and other studios are located.
Part of the land being sold includes the site of its iconic broadcast tower, which will eventually be dismantled, an insider said.
Analyst view
“The P6.24 billion that ALI will pay ABS for the parcel of land would go a long way towards reducing ABS’ P16 billion current debt load, so that’s a plus for ABS,” Alfred Benjamin R. Garcia, research head at AP Securities, told InsiderPH.
“As for ALI, the location is a prime spot and very close to the North Triangle area where ALI is focusing its development in the North, so it will notch well into ALI’s development portfolio,” he added.
ABS-CBN shares rose 2.59 percent to P4.75 each while Ayala Land slipped 0.22 percent to P22.45 apiece as the boarder PSE index lost 0.34 percent on Thursday.
Property expert: ABS-CBN sells land at a premium
Joey Bondoc, Colliers Philippines director for research, told InsiderPH that the sale price of P208,000 per square meter is above the market rate for the location.
But given the size of the property, he said Ayala Land might be developing a “micro township” to further cement its footprint in Quezon City.
“With the oversupply of condos and an office supply overhang, micro townships—where you don’t have to launch a massive number of condo units—might be the right direction at this point,” said Bondoc, adding that QC accounts for a large share of the property glut.
Lopezes sell to business allies
Even when facing challenges, the Lopez family carefully chooses who acquires its assets.
It took the same approach as Manuel V. Pangilinan when selling assets like toll roads and Manila Electric Co.
It’s no different with the Zobels of the Ayala Group, which partnered with the Lopezes on ventures like ABS-CBNmobile and the establishment of the Asian Institute of Management business school in the late 1960s.
What’s next?
ABS-CBN and Ayala Land, both publicly listed, are still finalizing the deal—a process that could take months.
For longtime fans, there’s still time before saying goodbye to parts of this historic complex and its towering broadcast landmark.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
