ABS-CBN Corporation has successfully renegotiated the terms of loans amounting to P14.56 billion following the non-renewal of its franchise by using real estate and equipment as collateral.

In a disclosure to the Philippine Stock Exchange, the firm said its existing lenders have “agreed to make its standstill agreement with the Company effective, i.e. not to declare any event of default or to exercise any rights or remedies under existing loan agreements.”

This is after ABS-CBN complied with the lenders’ condition of the creation of a mortgage and security interest over the Company’s real properties and equipment located in Mega Manila to secure an amount of P14.56 billion.

“The standstill agreement addresses the issue of the non-renewal of the Company’s broadcasting franchise, which the Company was required to maintain under its loan covenants. The effective date of the standstill agreement is May 31, 2021,” ABS-CBN said.

Amid the pandemic in July last year, congressmen voted to reject a new broadcast franchise for ABS-CBN, leading to the shutdown of the company’s broadcast network. 

Voting 70 to 11, the Committee on Legislative Franchises rejected the granting of a new franchise to ABS-CBN. Two congressmen inhibited and one abstained. 

The committee voted to “deny the application of ABS-CBN Corporation for a franchise to construct, install, establish, operate and maintain radio and broadcasting stations in the Philippines.”

It added that, “It is what it is–a denial of a privilege granted by the State because the applicant was seen as undeserving of the grant of a legislative franchise.”

Unable to operate its television and radio network without a franchise, ABS-CBN was forced to lay-off thousands of workers, close various businesses and charities, while maintaining limited operations through its digital platforms.

Source: Manila Bulletin (https://mb.com.ph/2021/06/07/abs-cbn-pledges-assets-for-p14-56-b-debt/?utm_source=rss&utm_medium=rss&utm_campaign=abs-cbn-pledges-assets-for-p14-56-b-debt)