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.
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