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ABS-CBN in talks with creditors on debt; shares fall 30%

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ABS-CBN in a stock exchange filing said it’s confident that “with the proper security in place,” it will meet its loan obligations under existing terms, including payment schedules. Image via Reuters.

Philippine broadcaster ABS-CBN Corp. said it’s in talks with creditors on its long-term debt, saying its financial obligations are manageable even after Congress rejected its bid for a new franchise.

Shares of the media company fell 30% as it resumed trading on Thursday, outpacing the Philippine benchmark stock index’s 1.7% drop. ABS-CBN was on trading suspension from July 13, the first trading day after a committee at the House of Representatives rejected its franchise application on July 10.

ABS-CBN in a stock exchange filing said it’s confident that “with the proper security in place,” it will meet its loan obligations under existing terms, including payment schedules. ABS-CBN has long-term debt of P26.7 billion ($540 million) as of end-September, according to data compiled by Bloomberg.

The franchise rejection significantly affects the company’s free-to-air business in the Philippines, which generated P15.9 billion in revenues for the period ended Sept. 30. On an unaudited consolidated basis, free-to-air advertising was about 50% of the company’s consolidated revenue.

Congress’ denial of its bid to get a fresh franchise to operate radio and television broadcast stations doesn’t affect ABS-CBN’s status as a corporation.

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The company plans to continue operating in other businesses that don’t require a legislative franchise, such as, international licensing and distribution, digital and cable businesses, and continue with syndication of content via various streaming service. — Bloomberg

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