SkyCable recapitalizes to cut deficit, prepare for IPO

MANILA, Philippines - SkyCable, the country’s leading cable television (CATV) service provider, is undergoing a recapitalization to pare down its deficit in preparation for an initial public offering (IPO) or private placement of shares.

The capital reorganization involves a two-step process that entails the decrease of SkyCable’s authorized capital stock from P700 million to P70 million by reducing the par value of its shares from P10 each share to P1 apiece, and increase of capitalization to P700 million.

In its filing with the Securities and Exchange Commission (SEC), SkyCable said the move is intended to “create additional paid-in capital which will help reduce the deficit in preparation for an IPO or infusion for private equity investors at an agreed valuation.”

Sky Vision subscribed to P296.91 million worth of shares while Unilink Communications subscribed to P41.67 million.

Company officials earlier said SkyCable is eyeing to raise P3 billion from the planned maiden offering of its shares next year.

Sky Cable has allotted P700 million for its capital expenditures this year to be used for the digital network’s infrastructure rollout as part of efforts to curb illegal cable connections.

SkyCable has moved towards digital encryption with the installation of digital set-up boxes for viewers to enjoy greater value from their paid cable subscription. Part of the applications offered through digital TV include video-on-demand and high definition TV.

To further augment its revenues, SkyCable had started offering broadband Internet and telephone services in the country. Dubbed Sky Broadband, the Internet service boasts of the highest speeds that can run as much as four times faster than any residential DSL. 

Sky Voice, on the other hand, provides telephone service through the same cable line that delivers cable TV and broadband Internet. At only P0.40 to P0.88 per minute, subscribers can place a call to any of the 21 countries available in the service.

The company will increase the penetration of Internet broadband and telephone services when it completes its conversion of its existing cable network to digital.

In line with efforts to boost its subscriber base and expand its reach, SkyCable has started offering prepaid cable loads in three-day, 15-day or 30-day increments for consumers with set-up boxes.

It also launched a low-end plan that allows the viewing public to watch 30 channels for a monthly fee of only P280.