Cojuangco in talks to sell Dream TV

By Lenie Lectura, Business Mirror

Posted at Jul 06 2011 09:27 AM | Updated as of Jul 06 2011 05:27 PM

MANILA, Philippines - Debt-ridden Philippine Multi-Media System Inc. (PMSI), operator of Dream Satellite TV, is for sale, said its owner businessman Antonio “Tonyboy” Cojuangco.

“For a good price, yes, why not?” said the businessman.

He revealed that the direct-to-home (DTH) service provider is in talks with one interested entity although he declined to identify the company.

Cojuangco also said a portion of PMSI’s debts were already converted into equity as required under the approved rehabilitation plan.

“We have already converted some [debts into equity]. But I don’t know the value. I’m not there on a daily basis,” said Cojuangco.

A source familiar to the negotiations said Ramon S. Ang, president of diversifying conglomerate San Miguel Corp. (SMC), could be a strong candidate if the debts of PMSI are to be converted into equity given that the DTH firm owes Bank of Commerce (BoC) a substantial portion of PMSI’s P1.15-billion debt. Ang could not be reached for comment as of press time.

Based on 2007 court filings, PMSI owes the bank P458.97 million. BoC is owned by SMC.

PMSI also owes foreign program providers more than P130 million in unpaid fees.The DTH firm must also pay Mabuhay Satellite Corp.(MSC), a subsidiary of Philippine Long Distance Telephone Co., about P396 million in unpaid rental fees since August 2003.

“They are converting debt into equity to pay off debts. A DTH license just fell into the lap of [Ang]. But it’s up to them really,” said the source.

PMSI filed for rehabilitation with branch 149 of the Makati Regional Trial Court on March 28, 2007. The rehab covers a period of 12 years, including a three-year grace period, and a repayment scheme of its outstanding obligations over a period of nine years on equal annual installments.

Dream TV has assets amounting to P1,246,733,008  and liabilities amounting to P1,157,362,239, net of stockholders’ equity as of February 28, 2007.

Dream TV is still by far the top DTH satellite operator in the country. “We have been here for seven years already and we are still doing well. We have the biggest share of the market, about 60 percent to 70 percent. Our rival Cignal just opened last year and they are matching our prices,” said Cojuangco.

Dream TV has 110,000 paying subscribers.

Cojuangco said the DTH service is the better choice against cable television because it’s cheaper to maintain and operate. “In the Philippines where we have several islands, I really think it’s expensive to operate a cable TV business. You have to lay the cable, you have to look for subscribers then you have to maintain the cable. Satellite TV is the only way to go outside of Metro Manila. I believe in that business model,” he said.