GMA Network buys back its PDRs

GMA Network will buy back its Philippine Deposit Receipts issued by its holding company to non-Filipinos. The company said the action was spurred by the findings of the recent hearings on the renewal of rival network ABS-CBN’s congressional franchise, which Congress rejected.

In a disclosure to the Philippine Stock Exchange on Tuesday, GMA Network said acquiring the PDRs was a means to protect foreigners’ PDR investments.

“As a measure of protection of the investments held by non-Filipinos in the Philippine Deposit Receipts (PDRs) issued by GMA Holdings Inc. pursuant to the registration of such securities with the Securities and Exchange Commission, and listing at the Philippine Stock Exchange, as might be affected by the 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 Corporation, the Corporation shall purchase and acquire such PDRs at the closing price or lower of the PDRs at today’s market i.e. Php 4.55, effective immediately and up to October 31, 2020,” the company said.

GMA added that, after the purchase, it plans to convert the PDRs into common shares.

GMA currently has 721.865 million PDRs with 10.89 percent, or about 78.592 million, owned by non-Filipinos.

During the hearings for the renewal of ABS-CBN’s legislative franchise, House officials accused the network of issuing PDRs to non-Filipinos, even as ABS-CBN insisted that these were issued legally.

Nueva Ecija Representative Micaela Violago also filed House Resolution 984 that urged all major broadcast companies to submit copies of the PDRs they issued to foreigners.

"In the interest of equity, equality and fairness, it is but proper that the other broadcasting companies' issuance of PDRs to non-Filipinos be also looked into," GMA News quoted Rep. Violago as saying in her resolution.

ABS-CBN has maintained that PDRs are merely financial instruments and that holders do not have voting rights and therefore have no influence in the network’s operations.

By PAUL JOHN CAÑA |Esquire

Source: Peso Economics