If you’re wondering why the sale of Sky Cable by ABS-CBN to PLDT fell through, you’re not alone. 

Creditors of ABS-CBN were also curious.

The Lopezes were selling Sky Cable for P6.75 billion to extinguish some loan obligations as a result of financial stress caused by former president Rodrigo Duterte’s tirades and Congress denying it a franchise renewal.

Bank of the Philippine Islands (BPI) president and CEO TG Limcaoco told Rappler that details of the fallout were not disclosed to them, no explanations, whatsoever.

“We were informed of the news the evening of February 21, the same time the press release was given out. They didn’t explain why,” Limcaoco said at the sidelines of a BPI event on Thursday, February 22.

Limcaoco, however, did not express concern over the matter and just reiterated the publicly available facts, noting that it was business as usual for both BPI and ABS-CBN.

“Our exposure to ABS-CBN remains. It remains to be the same company three, six months ago, so for us, it’s business as usual as well,” Limcaoco said.

Rappler also reached out to Unionbank executives, but they could not comment on the matter “at this time,” as both PLDT and ABS-CBN also did not disclose details of why the deal failed.

Based on ABS-CBN’s latest financial statement, ABS-CBN’s loans totaled P17.4 billion, bulk of which, or P16.2 billion, are non-current loans or are not due soon. 

The financial statement mentions other banks, including Security Bank, Philippine National Bank, and BDO, but these loans have either been settled or have longer tenors. Borrowings from Unionbank and BPI are the most recent ones and comprise bulk of the borrowings.

Of ABS-CBN’s total loans, P4.5 billion is Sky Cable’s borrowings. 

In 2021, ABS-CBN was able to arrange a debt standstill deal with creditors by putting up some assets for collateral.

According to ABS-CBN’s financial statement, the company paid BPI and Unionbank a total of P6.5 billion between 2020 to 2022.

How will ABS-CBN pay up now with the sale getting canceled? This is the question banks are asking.

Media observers and financial analysts whom Rappler sought for comment also expressed surprise over the scrapping of the deal since it came late in the acquisition stage – even more so since regulators had just approved it last January. Some of them are wondering whether there was a renegotiation of the deal related to Sky Cable’s debts that prompted both to back out.

ABS-CBN has been clear that it is no longer seeking a broadcast franchise and is instead pushing for more digital offerings and deals with other networks and streaming services.

As of the first nine months of 2023, ABS-CBN incurred a net loss of P1.1 billion, lower than the P3.3 billion bleeding during the same period a year ago.

Meanwhile, revenues reached P4.7 billion, a 65% dip abetted by the absence of political ads during the period.

So far, PLDT has issued just a one-sentence statement regarding the matter, as opposed to ABS-CBN’s press release which basically told Sky Cable subscribers not to cut the cord just yet. Both companies, however, said that it was a mutual decision. – Rappler.com

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