ABS-CBN debt payments rest on ad revenues: analyst

ABS-CBN News

Posted at May 11 2020 04:22 PM | Updated as of May 11 2020 05:00 PM

MANILA - ABS-CBN Corp's ability to pay its debt rests on the resumption of broadcast operations and advertising revenue, an analyst said Monday.

The country's largest media and entertainment company said on May 8 that it was committed to debt payments despite being told to "cease and desist" from broadcasting by the National Telecommunications Commission due to an expired franchise.

"The Company is committed and will continue to honor all existing obligations for goods delivered and services rendered by its third party suppliers. Currently, the Company remains in a good financial position and we expect to pay all our bank debts in accordance with the existing payment schedule," ABS-CBN said in the disclosure to the stock exchange. 

Excluding SkyCable, ABS-CBN has a total debt of P20.2 billion to UnionBank and BPI, based on company data. BPI's exposure worth P9.1 billion is maturing in 2025 while UnionBank's loan, worth P11.1 billion is maturing in 2026.

"If ABS doesn’t get the advertising revenue that it has then those numbers are in danger or they’ll have a hard time meeting those numbers," said COL Financial vice president and head of Research April Lee Tan.

ABS-CBN is losing P30 to P35 million every day that it is off the air, according to its petition to the Supreme Court that sought to overturn the NTC's closure order.

The ABS-CBN franchise bill has languished in Congress. Senate President Vicento Sotto said senators would approve the franchise if it reaches their chamber.

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