MANILA - GMA Network Inc said Tuesday it would "purchase and acquire" Philippine Deposit Receipts held by non-Filipinos to protect investments after lawmakers adopted a working group's recommendation denying the franchise of rival ABS-CBN's franchise in July.
During a special meeting of the Board of Directors, it was approved that GMA Network would purchase PDRs held by non-Filipinos at the closing price or lower effective immediately and up to Oct. 31, 2020, the network said in a disclosure to the stock exchange.
No details were given on how many of the said PDRs are held by foreign nationals.
"That as a measure of protection of the investments held by non-Filipinos in the Philippine Deposit Receipts (PDRs) issued by GMA Holdings Inc...the Corporation shall purchase and acquire such PDRs at the closing price or lower of the PDRs at today’s market."
GMA Network cited that such financial instruments "might be affected" by findings and recommendations of the technical working group..."as adopted by the House of Representatives Committee on Legislative Franchises on the application for a new franchise of ABS-CBN Corp," it said.
The House of Representative's technical working group's recommendation was to deny ABS-CBN its application for a fresh 25-year franchise. It was backed by 70 Congressmen against 11.
Philippine Deposit Receipts or PDRs are allowed under the regulations of the Securities and Exchange Commission and the Philippine Stock Exchange, where foreign nationals can avail of such instruments, incurring gains, without violating the Constitution's foreign ownership cap for media companies.
PDRs holders are considered passive investors and not shareholders, ABS-CBN lawyers earlier said. They have no voting rights and no rights to own or manage a media company, experts said during the House of Representative's franchise hearing for ABS-CBN Corp.
The House Committee on Legislative Franchises on July 10 denied ABS-CBN Corp a fresh 25-year franchise, citing PDRs as one of its violations despite the SEC and the PSE's stand that its PDRs were compliant with Philippine laws.