ABS-CBN Corp. and TV5 Network Inc. announced Thursday the termination of their planned multibillion-peso investment deal amid opposition from several lawmakers and the National Telecommunications Commission.
ABS-CBN of the Lopez Group and TV5 of the Metro Pacific Group said they mutually agreed to terminate the investment agreement dated Aug. 10 covering the proposed acquisition by ABS-CBN of a 34.99-percent stake in TV5 for P2.16 billion.
The two companies also ended the convertible note agreement where ABS-CBN would invest in a convertible note with a face value of P1.84 billon to be issued by TV5. The convertible note would have allowed ABS-CBN to acquire additional primary common shares of TV5 after eight years to no more than 49.92 percent.
The two companies formalized the termination of the agreement through a memorandum of agreement.
“The parties confirmed that they have not implemented any of the transactions covered by the investment agreement and the convertible note agreement,” said ABS-CBN.
The partnership was supposed to expand ABS-CBN’s audience reach after the cancellation of its legislative franchise, while helping TV5 grow and strengthen its free-to-air service.
SAGIP Party List Rep. Rodante Marcoleta earlier asked the Philippine Competition Commission and the National Telecommunications Commission to probe the joint venture between ABS-CBN and TV5 to prevent a monopoly or consolidation of market power that would lessen competition in the market.
The two groups also agreed to cancel the investment agreement involving their cable television units. Sky Vision Corp., ABS-CBN, Lopez Inc. and Cignal Cable Corp. said they mutually agreed to terminate the acquisition by Cignal Cable of 38.88 percent stake in SkyCable for P2.8 billion.
The companies also terminated the debt instrument agreement worth P4.38 billion which would allow Cignal to acquire the remaining 61.12-percent share in the Lopez-led cable company after eight years.
“The parties confirmed that they have not implemented any of the transactions covered by the sale and purchase agreement and the debt instruments agreement,” ABS-CBN said.
ABS-CBN and TV5 said last month the investment agreement would have a favorable impact on Philippine media and on free-to-air television—which remains the most affordable and extensive source of entertainment and public service to Filipinos.
The two broadcast networks then agreed to “pause their closing preparations” on ABS-CBN’s investment for 35-percent interest in TV5 owned by MediaQuest Holdings Inc. of the Metro Pacific Group “to address the issues which have been raised by certain regulators and NTC.”
The P2.16-billion investment agreement between ABS-CBN and TV5 was supposed to be completed in August, “subject to obtaining applicable regulatory approvals.”
The NTC in 2020 ordered ABS-CBN to stop operations of its free-to-air channels following the expiration of its congressional franchise. Republic Act No. 7966, which granted ABS-CBN a 25-year franchise to operate TV and radio broadcasting stations, expired on May 4, 2020.
The Radio Control Law bars the operation of a radio broadcasting station without a franchise from Congress.