ABS-CBN's share prices down 30%, loses P3.8B in market value

ABS-CBN on Thursday lost over P3.8 billion in market capitalization after its share price closed at P10.36 each, down 30% from its last traded price of P14.78 on July 10.

The Philippine Stock Exchange lifted the suspension on the trading of ABS-CBN's shares after it disclosed its plans after a House committee denied its application for a legislative franchise.

The media company lost P3.809 billion in market capitalization.

The network is now valued at P8,930,029,588.48 from its previous market value of P12,739,945,687.04 on July 10.

ABS-CBN, meanwhile, said that in terms of material contracts and/or financial obligations that will be affected by the non-renewal of its broadcast franchise.

Submission to plenary of documents on ABS-CBN franchise denial possible but not regular procedure —Cayetano
“We are not aware of other material contracts, nor have we received any claims or demands, the payment obligations of which will be adversely affected by the Resolution,” it said.

“The Company is likewise confident that any payments or financial obligations that may arise under its customary or usual business agreements are manageable and will not have a material adverse impact on ABS-CBN at this time,” it added.

ABS-CBN said it continues to explore and intends to pursue all available remedies and courses of action, and will comply with relevant legal, regulatory and contractual requirements, to be able to sustain its current and future business operations, which do not necessarily involve broadcast only.

“The denial of the franchise application of ABS-CBN to construct, install, establish, operate, and maintain radio and television broadcasting stations in the Philippines does not affect the primary franchise of ABS-CBN to exist as a corporation and does not affect the rights of its shareholders,” it emphasized.

Prior to the House resolution, ABS-CBN said it has been five months since parts of the country, including the National Capital Region, were placed under community quarantine, three months since the NTC directed it to cease operating all its radio and television stations throughout the Philippines, and almost a month since the NTC likewise directed the shutdown of ABS-CBN’s Digital Terrestrial Television (DTT) network.

“With the passage of the Resolution, the Company is no longer authorized to operate as a broadcast company,” it said.

“All of these unfortunate events, beyond the control of the Company, have adversely affected its ability to operate without incurring further losses,” it added.

ABS-CBN said it was is constrained to implement a retrenchment program effective at the close of business hours of August 31, 2020 even as it “takes all possible measures to protect and preserve its operations, and is continuously exploring alternative ways to be able to sustain its business.”

“In accordance with the requirements of the Labor Code, the Company will submit the necessary reports to the proper offices of the Department of Labor and Employment, inform all the affected employees, and provide the affected employees their separation pay in accordance with the law,” ABS-CBN said.

Source: TED CORDERO, GMA News

Source: Peso Economics