MUTUAL DECISION | TV5, ABS-CBN not pushing through with investment agreement

September 1, 2022 , 01:03 PM

By Beatrice Puente

(September 1, 2022) – TV5 Network, Inc. and ABS-CBN Corporation have mutually decided to terminate the investment agreement they announced earlier this month following the contentions raised by some lawmakers and some government agencies.

In a statement, the companies said they filed a disclosure to the Philippine Stock Exchange and the Securities and Exchange Commission (SEC) indicating that they would no longer push through with the landmark deal.

“The termination was also formalized 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,” read the statement.

Cignal Cable, which is owned by MediaQuest Holdings, will also not continue its sale and purchase agreement for 38.88% of Sky Cable. It was supposed to invest P2.862 billion in the deal.

Just last week, TV5 and ABS-CBN hit pause on their investment agreement to address the issues raised by several lawmakers in the House of Representatives, maintaining, however, that it would have a favorable impact on the country’s media landscape. The head of the Kapisanan ng mga Brodkaster ng Pilipinas (KBP) echoed a similar sentiment.

ABS-CBN was supposed to acquire 34.99% of the shares in TV5 at P2.16 billion. Despite this, MediaQuest Holdings would remain as the controlling shareholder since it was supposed to retain 64.79% of the shares. But with the investment deal now over, MediaQuest Holdings keeps its roughly 99% shares in TV5.

A legislative inquiry was made to determine if the milestone agreement was in line with the law. SAGIP Rep. Rodante Marcoleta, who was also part of the panel that rejected the franchise renewal bid of ABS-CBN in 2020, had earlier delivered a speech blasting the deal.

But Albay Rep. Edcel Lagman warned that the probe could spell threats to free press and free speech. He also criticized the memorandum of the National Telecommunications Commission (NTC) that bars franchise holders from transacting with firms with obligations to the government.

“The NTC memorandum is vague because it lacks the requisite standards for determining what is the nature, extent, and status of the so-called ‘outstanding obligations,'” wrote Lagman in a letter.

Infrawatch PH, a public policy think tank, called the termination of the investment deal between TV5 and ABS-CBN an “unfortunate development” that does not indicate a good signal for the future of business and governance in the country. At a time of economic hardship, the organization said “this is not the governance climate that the country needs today.”

“It shows how extraneous factors can terminate initiatives which could have raised our standards of public service, culture, and innovation,” said Infrawatch PH. “This also serves as a warning to businesses: That free enterprise will only be free if businesses align with the politics of those in power.”

(PM)

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Data Protection Officer
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Reliance corner Sheridan Streets
Mandaluyong City
tv5dataprivacy@tv5.com.ph

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