ABS-CBN reaches standstill agreement with its existing lenders

ABS-CBN Corp. announced that it has reached a standstill agreement, effective May 31st, with its existing lenders:

“The existing lenders of the company today agreed to make its standstill agreement with the company effective, i.e. not to declare any event of default or to exercise any rights or remedies under existing loan agreements, after compliance by the company with the lenders’ condition of the creation of a mortgage and security interest over certain assets of the company,” said ABS-CBN.

In July last year, ABS-CBN said that it was in talks with its creditor banks with regards to its long-term debts and expressed confidence in its ability to satisfy its financial obligations despite being denied franchise renewal.

Voting 70 to 11, the House of Representatives Committee on Legislative Franchises previously rejected the company’s application for a franchise renewal. The decision is considered highly controversial as many believe it was caused by the company’s history of being critical of President Duterte, who’s openly stated that the broadcaster was “undeserving” of the privilege.

ABS-CBN has carried out cost-cutting measures, which include rationalizing capital expenditures and streamlining manpower requirements, and said it would pursue all “available remedies” while complying with relevant legal requirements “to be able to sustain its current and future business operations, which do not necessarily involve broadcast only.”

The Bankers Association of the Philippines has previously expressed confidence that banks would be able to manage their credit portfolio in relation to the ABS-CBN’s franchise situation.

ABS-CBN Corp. shares closed 0.17% lower at ₱11.64 apiece on Thursday.

SOURCE: Business World