ABS-CBN sells crown jewel to cut debt
Metro Manila, Philippines - Listed broadcaster ABS-CBN Corporation has sold a sizable portion of its crown jewel – three hectares of its 4.4-hectare headquarters in Quezon City – for P6.2 billion to the Ayala group, one of its creditors.
The deal between ABS-CBN and property giant Ayala Land, Inc. was announced by both parties via separate disclosures to the stock exchange on Thursday, Feb. 27.
It came two months after a Dec. 30, 2024 deadline lapsed for the media conglomerate to meet conditions under an already amended loan agreement.
ABS-CBN owed banks P11.8 billion as of September 2024, its latest quarterly financial statements showed. That amount does not include other liabilities, and counts interest-bearing loans alone that stem from a syndicated loan dating back to 2010 from several lenders, namely, Ayala-led BPI as well as BDO, PNB, Allied Bank and Security Bank.
That loan covenant was anchored on ABS-CBN possessing a valid government franchise so that when it lost its franchise in 2020 and not renewed by Congress, the loan was restructured such that it was effectively tied to the company’s assets.
“The Property houses several buildings including production facilities,” ABS-CBN’s disclosure read.
It did not elaborate which buildings exactly are covered by the sale, but its headquarters - for decades before it lost its franchise - housed the main studios for its flagship news programs and noontime shows.
“The Company’s offices and studios will be consolidated in the remaining 1.4 hectares of the property to be retained by the Company,” the disclosure added.
The P6.2-billion proceeds from the sale of a portion of its Quezon City headquarters represent more than half of the P11.8-billion debt, and will be paid in installments spread over 10 years, according to ABS-CBN’s filing with the stock exchange. The deal has yet to be cleared by regulators, including the Philippine Competition Commission.
“Proceeds of the sale of property will be used to partially pre-pay its outstanding bank loans,” it said in the disclosure.
ABS-CBN’s revenues shrank by 10% year-on-year to P12.1 billion in the nine months ending September 2024, but the broadcaster managed to narrow its net loss by an annual 22% to P2.6 billion during the same nine-month period.
