Lopez group defers sale of half of Beyond Cable stake

The Lopez group has decided to defer indefinitely the sale of half of its holdings in Beyond Cable, the company created to consolidate the country’s two leading cable television companies namely Sky Cable and Home Cable, The STAR learned yesterday.

Proceeds from the sale was supposed to be used by the Lopez group largely to support its other businesses, which badly need funding from the parent firm, Benpres Holdings, as well as to improve operations of Sky Cable. Aside from primary shares, the Lopez group was also earlier looking at offering secondary shares.

Sky Cable president Eugenio Lopez III told The STAR that any plans to sell part of its share in Beyond Cable to a third party will have to wait until the Lopez group can get a better price for it.

Beyond Cable was earlier in discussions with two to three foreign companies engaged in the cable business to become the third party strategic investor. The cable industry has also been pushing for the passage of the cable bill that will finally allow foreign investments in cable companies.

Since cable is currently classified as part of broadcast, foreign equity is not allowed because of a provision in the Constitution which limits ownership and management of mass media to corporations wholly owned and managed by citizens of the Philippines.

To stem mounting losses from the respective operations mainly due to the depreciation in the value of the peso against the dollar that has made foreign programs acquisition expensive, Sky Cable and Home Cable of the PLDT group merged to save on some of the costs and attain efficiencies.

Under the current setup, Sky Cable which is the biggest cable TV company in the country has a 66.67-percent stake and Home Cable, 33.33-percent holdings in the new company Beyond Cable which retained Sky and Home as separate offerings to its customers. Sky and Home Cable have a combined market share of more than 70 percent.

Beyond Cable’s original plan was for the Lopez group to sell half of its stake to a third party that will provide not only financial but also technical expertise to the cable business. Once the sale had been made, Sky, Home, and the new investor are supposed to have an equal stake.

Lopez, who is also chairman of Beyond Cable, said that they have no idea yet when the sale will push through. "What we are focusing on right now is to stop cable piracy which is killing the business," he told The STAR.