ABS-CBN plans to offer P5 billion in retail bonds
MANILA, Philippines - Multimedia giant ABS-CBN Corp. is planning to raise P5 billion through a retail bond issue, with an option to increase the amount up to P10 billion to finance its capital expenditure program for the next five years.
"We are extremely pleased to have been given the highest possible rating of PRS Aaa from Philippine Ratings Corporation (PhilRatings) for our proposed bond issuance. I believe this is a reflection of the strength of ABS-CBN’s business and the track record of its management. The triple A rating should give prospective investors confidence in the Company’s ability to meet its financial obligations," ABS-CBN Chief Financial Officer Aldrin M. Cerrado said in a statement.
ABS-CBN earlier said it is allocating P10 billion in capital expenditures over five years starting 2014.
The company will invest P4 billion for production forward planning initiative, which includes the construction of sound stages.
“The planned sound stages will deliver improvements to our operations by increasing production quality and reducing costs associated with on-location shoots," Cerrado said. At present, the majority of ABS-CBN’s filming is done on-location. With the sound stages, the need for on-location shoots will be reduced significantly.
ABS-CBN is setting aside P2 billion for the expansion of its pay-TV business through Sky Cable, and P1 billion for digital terrestrial television (DTT), as the Philippines starts shifting to the Japanese digital TV standard from an analog system this year. Another P3 billion will be set aside for general capital expenditures through 2018.
"The strategic initiatives being adopted by management should ensure that we continue to provide high quality content to our audiences in an efficient and cost-effective manner,” Cerrado said.
ABS-CBN is on track for the Philippines’ switch to DTT, with test broadcasts are being conducted in different parts of the country.
ABS-CBN has also successfully expanded its business into print, licensing, music, TV shopping, telecommunications and theme parks.
Last year, the company started its TV shopping business, A CJ O Shopping Corporation, and its cellular telecommunications business, ABS-CBNmobile - which allows customers to view ABS-CBN's content on smartphones in addition to data, SMS, and voice products.
The company also plans to open its educational theme park, "Kidzania,” at the Fort Bonifacio Global City later this year.
ABS-CBNnews.com is the news website of ABS-CBN Corp.