|
By Darwin G. Amojelar Reporter
ABS-CBN Broadcasting Corp. on
Friday offered to buy the debt of Central CATV Inc. so the
country’s largest cable television operator can pursue its growth
plans.
In a disclosure to the Philippine
Stock Exchange, Miguel Jose T. Navarrete, ABS-CBN chief finance
officer, said the company has offered two options for the retirement
of Central CATV’s outstanding obligations. The first involves ABS-CBN
buying the cable TV operator’s debt at a 30-percent discount,
while the second entails swapping Central CATV’s IOUs with those
of the broadcast giant.
The options are contained in an
agreement signed in July 2004 among Central CATV, Sky Vision Corp.,
Philippine Home Cable Holdings Inc., Equitable PCI Bank-Trust
Banking, among others.
ABS-CBN has allocated up to P900
million for the cash offer option. Under the debt swap option,
Central CATV creditors can exchange their IOUs with ABS-CBN debt at
100 percent of the principal amount.
Navarrete said the ABS-CBN debt
shall have a tenor of seven years with a bullet principal repayment
on the seventh year and shall bear a fixed rate of 2 percent per
year, payable quarterly in arrears.
The total outstanding principal
amount of debt under consideration is P2.7 billion.
The invitation is conditioned on
a minimum principal amount of P1.25 billion of debt being offered
for sale or exchange.
“The principal purpose of the
invitation is to facilitate the restructuring of the Central CATV
debt,” Navarrete said.
“A successful restructuring of
the Central CATV debt will allow [it] to focus on its business and
capitalize on the market opportunity that exists in the Philippine
Pay TV industry,” he added.
The ABS-CBN invitation will
expire at 5 p.m. on August 30, unless extended.
|
