Cignal Cable Acquires 38.88% Of Sky Cable For PHP 2.86 Billion
August 16, 202211:13 pm
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On August 10, 2022, Cignal Cable Corporation entered into a Sale and Purchase Agreement with Sky Vision Corporation, ABS CBN Corporation, and Lopez, Inc. for the acquisition of 38.88% of the total issued and outstanding capital stock of Sky Cable Corporation, one of the leading companies that offers cable television and broadband services under the Sky Cable brand, for a total consideration of PHP 2.862 Billion.
The investment on Sky Cable by Cignal Cable is expected to benefit the former’s existing customer base consisting of over 300 thousand cable subscribers and close to 350 thousand broadband subscribers as of the end of June 2022. This will allow Sky Cable to expand significantly its coverage, offerings, and services. It will also enable Sky Cable to expand its broadband reach and capacity in support of the government’s plan to prioritize the development of the country’s digital infrastructure, reaching a larger portion of the Filipino population and providing them with greater choices for their content and internet requirements.
Present at the contract signing were (L-R) Smart and PLDT President and CEO Mr. Alfredo S. Panlilio, Mediaquest Holdings Chairman Mr. Manuel V. Pangilinan, Mediaquest Holdings President & CEO Ms. Jane J. Basas, Sky Cable Corp President and CEO Mr. Antonio S. Ventosa, ABS-CBN Chairman Mr. Mark L. Lopez, and ABS-CBN President and CEO Mr. Carlo L. Katigbak
Cignal Cable believes that its entry into Sky Cable will strengthen and enhance its public services offerings. Currently, Sky Cable is operating the Knowledge Channel, which provides educational programs for children, and the DepEd Channel, which offered Long-Distance Learning to Filipino youth during the pandemic in cooperation with the Department of Education. Cignal Cable plans to expand the public services programs that will be offered by Sky Cable to assist the Government in providing public services to the Filipinos, particularly in remote areas.
Simultaneously with the execution of the Sale and Purchase Agreement, the parties executed a Debt Instruments Agreement, whereby Sky Vision Corporation agreed to issue an Exchangeable Debt Instrument (the “Debt Instrument”) to Cignal Cable with a face value of PHP 4.388 Billion. The Debt Instrument gives Cignal Cable the option to acquire additional Sky Cable shares equivalent to 61.12% of the outstanding capital stock of Sky Cable after 8 years from its issuance, subject to obtaining regulatory approvals. Under the Debt Instruments Agreement, Cignal Cable will also acquire a Convertible Note issued by Sky Cable (the “Convertible Note”) with a face value of PHP 250 Million and convertible into primary shares of Sky Cable representing about 1.84% of outstanding capital stock.
The proceeds of the Sale Shares, the Convertible Note, and the issuance of the Debt Instrument in the total amount of PHP 7.5 Billion will be used to repay certain obligations of ABS-CBN and Sky Vision to fund the investment of ABS-CBN in TV5.
ePLDT, a subsidiary of PLDT, Inc., will fund, through a loan extended to Cignal Cable, the PHP 7.5 Billion acquisition cost of Cignal Cable of the Sale Shares and the foregoing debt instruments.
Financial closing, which is expected within the month of August 2022, shall be subject to compliance with certain closing conditions which include, full payment of the purchase price for the common shares, subscription to the Debt Instrument, and purchase of the Convertible Note.
AlphaPrimus Advisors and Picazo Buyco Tan Fider & Santos advised the MediaQuest group on this transaction while the law firms of Romulo Mabanta and Quiason Makalintal advised ABS-CBN.