In a preemptive bid to protect its foreign creditors, GMA Network Inc. is buying back its Philippine Depositary Receipts (PDRs).
GMA Network said its board of directors had approved the acquisition of PDRs issued by GMA Holdings Inc. at or below P4.55 per share in a Philippine Stock Exchange. It was filing on Tuesday, until Oct. 31 this year. This is around 46.5 percent lower than their 2007 P8.50 share issue price.
The Constitution prohibits media companies in the Philippines from having foreign owners.
After the buyback, it will no longer have any PDRs. GMA Network said once the purchase is completed, it will convert the PDRs into common shares.
The decision comes after a House of Representatives committee voted last July 10 to refuse a new 25-year franchise to the media giant and GMA competitor ABS-CBN Corp. after challenging the selling of PDRs through a series of hearings, among other matters.
The Securities and Exchange Commission earlier approved the PDR offers of ABS-CBN and GMA Holdings.
In its filing, GMA said the issuance of PDRs “may be influenced by the conclusions and recommendations of the Technical Working Group as adopted by the Committee on Legislative Franchises of the House of Representatives on the application for a new ABS-CBN Corp franchise.”
The development underlines the broader effect of the recent franchise hearings by ABS-CBN on assets beyond the loss of the television. And also, for the radio broadcasts by the media giant and the resulting mass layoffs.
In 2007, GMA released its own PDRs. As it was an approved means to raise funds. In the aftermath of the Asian financial crisis, ABS-CBN published its PDRs in 1999.
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