CURRENT REPORT UNDER SECTION 17 OF THE SECURITIES REGULATION CODE AND SRC RULE 17.2(c) THEREUNDER
1. Date of Report (Date of earliest event reported)
Aug 10, 2022
2. SEC Identification Number
1803
3. BIR Tax Identification No.
00406761000
4. Exact name of issuer as specified in its charter
ABS-CBN CORPORATION
5. Province, country or other jurisdiction of incorporation
Metro Manila
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
ABS-CBN Broadcasting Center, Sgt. Esguerra Ave. cor. Mother Ignacia Street Quezon CityPostal Code1103
8. Issuer's telephone number, including area code
34152272
9. Former name or former address, if changed since last report
Not Applicable
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class
Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
Common Shares
902,851,848
11. Indicate the item numbers reported herein
Item 9
The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.
ABS-CBN CorporationABS
PSE Disclosure Form 5-1 - Substantial Acquisitions References: SRC Rule 17 (SEC Form 17-C) and Section 4.4 and/or Section 5 of the Revised Disclosure Rules
Subject of the Disclosure
Subscription by ABS-CBN to common shares and convertible note issued by TV5 Network, Inc. ("TV5")
Background/Description of the Disclosure
The Board of Directors of ABS-CBN Corporation ("ABS-CBN") approved today the subscription by ABS-CBN to 6,459,393 common shares of TV5 Network, Inc. ("TV5") representing 34.99% of the outstanding capital stock of TV5 for an aggregate subscription price of P2.16 billion.
The Board also approved the subscription by ABS-CBN to a convertible note to be issued by TV5 in the principal amount of P1.84 billion. The convertible note is convertible, subject to obtaining applicable regulatory approvals, into 5,500,448 additional common shares of TV5 after eight years from its issuance. In the event that the convertible notes are converted, ABS-CBN will own not more than 49.92% of the outstanding capital stock of TV5.
ABS-CBN and TV5 also executed today an Investment Agreement for such subscription to shares and a Convertible Note Agreement for the issuance of the convertible notes.
Date of Approval by Board of Directors
Aug 10, 2022
Date of Approval by Stockholders
N/A
Other Relevant Regulatory Agency, if applicable
N/A
Date of Approval by Relevant Regulatory Agency
N/A
Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction
The investment in TV5 should strengthen the partnership between TV5 and ABS-CBN and open significant opportunities for revenue enhancement, cost efficiencies, and various synergies. Collaboration between both parties in the production and distribution of content, and other areas should allow the company to improve audience engagement/experience and increase market share.
Description of the transaction including the timetable for implementation and related regulatory requirements, if any
ABS-CBN, TV5, Mediaquest Holdings Inc and some of its affiliates will enter into a shareholders’ agreement upon closing of the transaction to govern their relationship.
Completion of the transaction, which is expected within the month of August 2022, and full payment of the subscription price to the shares and the principal of the convertible notes will be made by ABS-CBN upon satisfaction of the closing conditions, among which are:
a. All required consents and corporate actions having been obtained; b. Compliance with covenants, agreements, and representations and warranties. c. No event shall have occurred that would prevent a party from fulfilling its obligations, or the transactions contemplated from happening.
Identities of the parties to the transaction
Name
Nature of Business
Nature of any material relationship with the Issuer, their directors/officers or any of their affiliates
TV5 Network, Inc.
Owning, controlling, maintaining, operating, and managing radio or broadcasting and television stations, and content distribution and production services
N/A
Terms and conditions of the transaction
The nature and amount of consideration (e.g. price per share, the aggregate amount)
The Company will subscribe to 6,459,393 common shares of TV5 Network, Inc. ("TV5") representing 34.99% of the outstanding capital stock of TV5 for an aggregate subscription price of P2.16 billion.
ABS-CBN will also subscribe to a convertible note to be issued by TV5 in the principal amount of P1.84 billion. The convertible note is convertible, subject to obtaining applicable regulatory approvals, into 5,500,448 additional common shares of TV5 after eight years from its issuance. In the event that the convertible notes are converted, ABS-CBN will own not more than 49.92% of the outstanding capital stock of TV5.
ABS-CBN and TV5 also executed today an Investment Agreement for such subscription to shares and a Convertible Note Agreement for the issuance of the convertible notes.
ABS-CBN, TV5, Mediaquest Holdings Inc and some of its affiliates will enter into a shareholders’ agreement upon closing of the transaction to govern their relationship.
Basis upon which the amount of consideration or value of the transaction was determined
An independent Philippine Stock Exchange accredited firm conducted a valuation of TV5. The appraisal firm adopted two methodologies: 1) Net Asset Value (NAV) with certain adjustments as deemed appropriate by its analysis and 2) Relative Valuation .
The number of shares to be acquired
6,459,393
Ratio/percentage to total outstanding capital stock
34.99
Terms of payment
Full payment of the subscription price to the shares and the principal of the convertible notes will be made by ABS-CBN upon satisfaction of the closing conditions.
Conditions precedent to closing of the transaction, if any
Completion of the transaction, which is expected within the month of August 2022, and full payment of the subscription price to the shares and the principal of the convertible notes will be made by ABS-CBN upon satisfaction of the closing conditions, among which are:
a. All required consents and corporate actions having been obtained; b. Compliance with covenants, agreements, and representations and warranties. c. No event shall have occurred that would prevent a party from fulfilling its obligations, or the transactions contemplated from happening.
Description of the company subject of the transaction
Nature and business
TV5 is primarily engaged in the business of owning, controlling, maintaining, operating, and managing radio or broadcasting and television stations, and content distribution and production services. It currently owns and operates a broadcasting television network – TV5 and national and regional radio networks.
Discussion of major projects and investments
To be determined
List of subsidiaries and affiliates, with percentage holdings
Effect(s)/impact on the business, financial condition and operations of the Issuer
The investment in TV5 should strengthen the partnership between TV5 and ABS-CBN and open significant opportunities for revenue enhancement, cost efficiencies, and various synergies. Collaboration between both parties in the production and distribution of content, and other areas should allow the company to improve audience engagement/experience and increase market share.
Other Relevant Information
This disclosure may contain some statements which constitute “forward-looking statements” that are subject to a number of risks and opportunities. Although ABS-CBN believes that expectations reflected in any forward-looking statements are reasonable, it can give no guarantee of future performance, action or events.
ABS-CBN CorporationABS