New ABS-CBN investor I&C eyes board role, secures safeguards in P3.5-B deal

Insider Spotlight

• I&C is betting P3.5 billion on ABS-CBN, emerging with 27.06 percent of voting stock, including preferred shares. 
• The Lopez family keeps control: Lopez Inc. will hold 44.35 percent, while vehicles for the heirs of Gabby Lopez’s branch, Manolo Lopez and Prescy Lopez-Psinakis add another 17.02 percent.
• I&C built safeguards into the deal, covering key ABS-CBN and Sky-related obligations while opening the door to board representation.

ABS-CBN Corp.’s biggest new investor is bringing more than P3.5 billion to the table.

Newly disclosed terms show I&C Holdings Corp., led by a team of investment bankers, is positioning itself as a significant long-term partner, with potential board representation and protections against some of the financial problems ABS-CBN is still working through.

The regulatory filing provides new details on the conditions attached to I&C’s investment, how the P6 billion will be structured and what ABS-CBN’s ownership will look like after the deal.

I&C will invest P3.5 billion for 958.9 million shares at P3.65 each, while Lopez Inc. is putting in P300 million Crème Investment Corp., Mantes Corp. and Presta Holdings Co. are investing a combined P2.2 billion. 

Crème represents the heirs of Eugenio “Geny” Lopez Jr., led by Eugenio "Gabby" Lopez III; Mantes represents the heirs of Manuel “Manolo” Lopez; and Presta represents the heirs of Presentacion Lopez-Psinakis.

What I&C wants protected

I&C has already paid P1.5 billion and will hand over the rest once regulators clear the deal, with the money going to ABS-CBN’s working capital.

• ABS-CBN would shoulder Sky Cable employee separation payments above P402 million.
• The company also remains responsible for certain other Sky-related costs covered by the agreement.
• ABS-CBN remains responsible for separately disclosed losses exceeding P3 billion.
• I&C required ABS-CBN’s restructured BPI and UnionBank loans to carry terms at least as favorable as the current ones.

A new ownership map

The investment will significantly change who owns ABS-CBN, but the Lopez side will remain firmly in control.

I&C will emerge with 27.06 percent of ABS-CBN’s total voting stock (including preferred shares), while Lopez Inc.’s direct stake will fall from 78.40 percent to 44.35 percent. Crème will hold 5.94 percent, Mantes 5.93 percent and Presta 5.15 percent, giving the three Lopez family vehicles another 17.02 percent combined and keeping the wider Lopez group well ahead of the newcomer.

I&C’s position is even bigger when looking only at common shares with nearly 38 percent ownership. 

The investment firm is run by Fortman Cline founders Daniel D. Ibasco and Gary Emerson P. Cheng, along with corporate secretary Clarisse Darlene Rose Tan.

A voice in the boardroom

I&C could also gain a direct say in how ABS-CBN is run.

ABS-CBN plans to expand its board from seven to nine directors, while the investment agreement specifically allows I&C to nominate representatives to the board, giving the new investor a role that could extend well beyond its P3.5-billion cash infusion.

—Edited by Miguel R. Camus