Lopez-owned Sky Cable to acquire assets of Home Cable

Lopez-owned Sky Cable is set to acquire all the assets of Home Cable, the country’s second biggest cable TV company owned by the Philippine Long Distance Telephone Co. (PLDT), under a master consolidation agreement (MCA) that will be signed in the new few days, The STAR learned yesterday.

Sky Cable president Eugenio Lopez III told The STAR that the PLDT group will be paid in terms of shares in Sky Cable, the biggest CATV firm in the country in terms of market share and assets. The value of Home Cable’s assets was not disclosed.

With Sky Cable owning the assets of Home Cable, the combination will result in a 75-to 80-percent commanding share of the cable TV market.

Lopez said they have decided to retain Sky Cable because Home Cable’s franchise has already expired. Instead, Home Cable will own the second biggest share in Sky Cable, next to the Lopezes.

On top of Sky Cable, meanwhile, will be Beyond Cable which will be owned 66.67 percent by the Lopez group through Sky Vision and 33.33 percent by PLDT through Mediaquest/Unilink. Beyond Cable will be the holding firm for all shareholders of Sky.

The consolidation of the country’s two largest CATV companies at the shareholder level via the impending signing of the MCA came after Sky and Home signed an agreement with their respective creditors that will pave the way for the restructuring of a total of P2.6 billion in debts.

Sources told The STAR that it is only the Bank of the Philippine Islands (BPI) that will not sign the agreement but BPI has also said it will not interpose any objection to the MCA signing.

During the earlier signing of a memorandum of agreement with the creditors, Lopez-owned ABS-CBN has committed to source an initial $20 million or more than P1 billion which is expected to be put in by Jan. 15 of next year. Another $10 million has likewise been committed by the Lopez group.

The $30 million will be in the form of a loan by ABS-CBN to Sky Cable which is convertible to equity later. The money will be used to update interest payments to the banks and for use in operations to improve the viability of the cable business.

Highly placed sources told The STAR that once the first $20 million comes in, the banks will immediately restructure the loans. "The banks just wanted to see the color of their (Sky and Home) money," the source said. Creditors of Sky and Home include UCPB, PCI Bank, BPI, Metrobank, Security Bank, Development Bank of the Philippines, among others.

As to the payment of the principal obligation, the banks and the two cable TV operators have agreed under the MOA to work out an extension of payments over a period of time, taking into account the business plan prepared by Sky and Home.

The STAR also learned that the complete consolidation of Sky and Home with Sky Cable as the surviving entity was also brought about by a demand from the banks that they be collecting payments only from one entity.

Sources also revealed that PLDT has two years within which to put in the equivalent of whatever new funds the Lopez group will be putting in. "Otherwise, it will be diluted to a minority once the ABS-CBN loan is converted to equity," a source explained.