Shareholders on Wednesday approved key changes needed for the investment, including tripling ABS-CBN’s authorized capital to P4.5 billion and expanding its board from seven to nine directors.
The deal preserves continuity at a company still rebuilding from the loss of the broadcast franchise that once powered the country’s largest television network.
“Lopez Inc., together with its stockholders, Crème, Mantes, and Presta, and together with ABS-CBN, will continue to determine ABS-CBN’s strategic direction. The new major investor will be consulted and their rights will be respected,” ABS-CBN chair Mark Lopez said during their special stockholders’ meeting on Wednesday.
Lopez family keeps the wheel
ABS-CBN has pivoted to content creation and online distribution after efforts to renew its broadcast franchise were killed by former president Rodrigo Duterte’s allies in Congress.
Lopez said the management team would also remain unchanged, apart from the expansion of the board.
A new investor enters the room
The new face at the table will be I&C Holdings Corp., a newly formed investment firm led by Fortman Cline founders Daniel D. Ibasco and Gary Emerson P. Cheng that is putting P3.5 billion into ABS-CBN.
Crème, Mantes and Presta are investment vehicles representing the heirs of Eugenio “Geny” Lopez Jr., Manuel “Manolo” Lopez and Presentacion “Prescy” Lopez-Psinakis, respectively.
I&C will emerge with 27.06 percent of the company’s voting stock, while Lopez Inc., Crème, Mantes and Presta will retain a combined 61.37 percent, leaving the family firmly in control.
New investor clears a key hurdle
The shareholder approvals clear important corporate steps needed to bring in the new money and give I&C a significant stake in the company without dislodging the Lopez family.
“The increase in authorized capital stock will allow the infusion of the 6 billion pesos in equity from our investors. The additional capital is expected to strengthen the company's balance sheet, support working capital requirements, fund the company's turnaround and initiatives,” ABS-CBN president and CEO Carlo Katigbak said.
“We believe these measures will enhance the company's long-term prospects and create value for all shareholders.”
Fresh money for an unfinished turnaround
The capital gives ABS-CBN more room to tackle the financial side of a turnaround that remains unfinished, as it works through losses and debt and restructures loans with Bank of the Philippine Islands and UnionBank.
Part of the ongoing turnaround involved another round of job cuts to stay afloat, Katigbak announced during a company-wide townhall meeting earlier this month. The ABS-CBN chief also promised this would be the last retrenchment under his leadership.
Meanwhile, I&C has already paid P1.5 billion toward its investment and negotiated safeguards around some of ABS-CBN’s remaining obligations, including Sky Cable employee separation payments and separately disclosed losses exceeding P3 billion.
—Edited by Miguel R. Camus
