ABS-CBN, TV5 'pause' investment deal

Media companies ABS-CBN and TV5 on Wednesday announced they are putting on hold their planned investment deal amid issues raised by lawmakers and the National Telecommunications Commission (NTC).

In similar statements, the two companies said they have agreed to a pause in their closing preparations.

The move was made to "address the issues which have been raised by certain legislators and the National Telecommunications Commission on the proposed investment by ABS-CBN for a minority interest in TV5."

The two early this month announced their investment agreement that will allow ABS-CBN to "acquire 6,459,393 primary (new) common shares in TV5 representing 34.99% of the total voting and outstanding capital stock of TV5 for an aggregate subscription price of P2.16 billion."

"Simultaneously with the execution of the Investment Agreement, the parties execute a Convertible Note Agreement pursuant to which ABS-CBN to invest in a Convertible Note with a face value of P1.84 billion to be issued by TV5. The Convertible Note will allow ABS-CBN, subject to obtaining applicable regulatory approvals, to acquire additional primary common shares of TV5 after 8 years from the issuance of the Convertible Note, and thereby increase its equity in TV5 to no more than 49.92 percent of the outstanding capital stock of TV5," ABS-CBN said in a previous statement.

Lawmakers, however, filed resolutions to look into the franchise of TV5 for possible violations over its alleged foreign ownership and its block time agreement with ABS-CBN.

Sagip party-list Rep. Rodante Marcoleta said the Philippine Competition Commission and the NTC should carefully review the agreement to ensure it is in accordance with the law as it may lead to a monopoly.

NTC Commissioner Gamaliel Cordoba, for his part, earlier said the commission would review the partnership agreement due to the alleged violations of ABS-CBN.

In their statement, ABS-CBN and TV5 said the "pause will give the space for both media organizations to respond to the issues, and accommodate any relevant changes to the terms."

Albay Representative Edcel Lagman earlier said the joint inquiry by the House committees on legislative franchises and on trade and industry on TV5's investment deal with ABS-CBN may result in the "derogation" of press freedom and free speech. —KBK, GMA News