ABS-CBN secures P1.65-B loan from Security Bank

MANILA, Philippines - Multimedia giant ABS-CBN Corp. closed a loan package worth P1.65 billion with Security Banking Corp. The proceeds of the loan would refinance the media company’s existing obligations.

ABS-CBN chief information officer Eulogio Masilungan informed the Philippine Stock Exchange (PSE) that the company obtained a four-year term loan from Security Bank last Feb. 28 to refinance its existing obligations with the bank.

Masilungan said the loan would carry an interest rate of 4.25 percent per annum.

The company’s Board of Directors last Jan. 30 approved the refinancing of its outstanding obligations under its existing P1.65 billion loan with Security Bank through a four-year term to be arranged by SB Capital Investment Corp.

ABS-CBN earlier raised P6 billion from the sale of seven- and 10-year fixed rate bonds arranged by BDO Capital and Investment Corp., BPI Capital Corp., and HSBC and listed at the Philippine Dealing and Exchange Corp. (PDEx).

Proceeds from the fund raising activity would be used to finance its P10 billion capital expenditure program over the next five years, almost half of which would be used for the production of television programs as well as movies.

ABS-CBN is spending P4 billion for production forward planning including production canning or advanced production of television programs and movies as well as construction of sound stages.

Another P3 billion would be used starting this year until 2019 for the company’s general capital expenditures, while P2 billion would be used for the capital expenditure program of its pay TV business under SkyCable Corp.

ABS-CBN would also use proceeds of the fund raising activity to comply with the order of the National Telecommunications Commission (NTC) to shift to Japan ‘s Integrated Service Digital Broadcasting-Terrestrial or ISDB-T standard instead of Europe ‘s Digital Video Broadcasting-Terrestrial 2 or DVB-T2.

ABS-CBN is on track for the Philippines, switch to Digital Terrestrial Television. Test broadcasts are being conducted in different parts of the nation. It has also successfully expanded its business into print, licensing, music, TV shopping, telecommunications and theme parks.

Likewise, the company through ABS-CBN Convergence has tied up with Ayala-led Globe Telecom Inc. last May to launch ABS-CBN mobile as a third player in the competitive telecommunications industry dominated by rivals Philippine Long Distance Telephone Co. (PLDT) and Globe.

ABS-CBN is in the middle of buying back P500 million worth of ABS-CBN Holdings Corp. common shares or Philippine Deposit Receipts. The buy-back program would last for a period of one year.

The company has so far spent P52.78 million from the buy back of 1.881 million shares.