ABS-CBN Corporation reached a standstill agreement with lenders by putting up assets as collateral, as the media giant fights to operate after Congress denied it a broadcasting franchise.
In a disclosure to the Philippine Stock Exchange on Friday, June 4, ABS-CBN said the network and lenders agreed on a P14.56-billion mortgage registration amount, effectively protecting the company from a loan default.
The effective date of the standstill agreement is May 31.
“The standstill agreement addresses the issue of the non-renewal of the company’s broadcasting franchise, which the company was required to maintain under its loan covenants,” ABS-CBN said.
The network did not specify which properties were covered in the collateral, but noted that it includes the properties and equipment located in Mega Manila.
ABS-CBN has yet to disclose its fourth quarter and full-year 2020 earnings.
As of the third quarter of 2020, the Kapamilya network has total interest-bearing loans amounting to P20.2 billion, mostly long-term loans.
ABS-CBN reported a net loss of P7.3 billion from January to September 2020, a reversal from the P2.4-billion profit a year ago.
ABS-CBN was forced to go off-air in May 2020 and let go of hundreds of employees amid a coronavirus pandemic-triggered recession, after the National Telecommunications Commission ordered it to stop television and radio operations.
Some ABS-CBN shows found refuge in Christian station Zoe Broadcasting Network and rival network TV5 through blocktimer deals. It also ramped up its online presence.
The closure of the media giant, which has been on the receiving end of President Rodrigo Duterte’s scathing tirades, is widely seen as a major blow to press freedom.
Duterte, whose allies dominate the House of Representatives, earlier questioned the Lopez-owned network for its unpaid debts to the government nearly two decades ago. The Development Bank of the Philippines, however, noted that it had not written off any loans of ABS-CBN.
Given the context of ABS-CBN’s closure, many were quick to criticize the House when it voted unanimously for a bill that seeks to protect free speech by declaring August 30 as National Press Freedom Day. – Rappler.com