ABS-CBN in 'exploratory talks' with investor
MANILA, Philippines – Media giant ABS-CBN Corp. is studying fund-raising options, including welcoming a financial investor to the fold.
When asked for more details about this during the press briefing following the company's annual stockholders meeting on Tuesday, April 23, ABS-CBN chairman Eugenio Lopez III said the company is "not looking at strategic investors [but] primarily financial investors."
ABS-CBN chief finance officer Rolando Valdueza added, “We are doing exploratory talks.”
The fresh funds will be used to bankroll the company’s initiatives, including the impending shift to digital television as mandated by the National Telecommunications Commission (NTC).
At the stockholders meeting, stockholders ratified the amendments to ABS-CBN's Articles of Incorporation removing the preemptive rights of shareholders in the stocks when the company issues or sells shares.
This will give the company better flexibility in raising capital with willing investors.
"The pre-emptive rights provision in the articles of incorporation restricts a listed company's flexibility in raising equity funding. Often the need arises for a company to quickly avail of opportunities offered by favorable market conditions to obtain the highest possible price from the security it is offering," Lopez told the stockholders.
Under the law, he said ABS-CBN has to go through a tedious and lengthy rights offering process.
“Thus by the time the legal requirements are met the market conditions may no longer be attractive,” he explained.
He said the broadcast company was one of the few major listed companies where stockholders still had pre-emptive rights.
In 2012, ABS-CBN saw profits rise by 23% to P1.708 billion and consolidated sales up 13% to P31.7 billion. - Rappler.com