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Avoiding ABS-CBN's Issues? GMA Says it Will Buy PDRs

ABS-CBN's franchise was denied in part due to PDRs.
Aug 11, 2020
Photo/s: GMA Official Logo

GMA Network said Tuesday it would buy Philippine Deposit Receipts held by foreigners to protect their investments, mindful of the denial of rival ABS-CBN Corp's franchise renewal that was based in part on the PDRs.

The PDRs will be bought at Tuesday's closing price, or lower, effective immediately and up to Oct. 31, GMA Network told the stock exchange, citing the results of a board meeting on the same day.

Among issues raised against ABS-CBN Corp during the House franchise hearings was the issuance of PDRs by ABS-CBN Holdings to foreigners. Some lawmakers said this violated the constitutional prohibition on foreign ownership of mass media. The Lopez-owned network said PDRs were approved by the SEC and issued by other media entities. Also, PDR holders don't own shares of stock or have voting rights.

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In GMA's case, the PDRs were issued by GMA Holdings Inc. The broadcaster said in the disclosure: "... 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."

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"After the purchase and acquisition of the PDRs in accordance with the foregoing resolution, the Corporation shall convert the said PDRs into common shares," GMA said.

House lawmakers also questioned the citizenship of ABS-CBN Chairman Emeritus Eugenio "Gabby" Lopez III and accused its news division of bias. Network officials faced the marathon hearings and denied wrongdoing.

ABS-CBN, which has been off the air since May 5, will start a painful retrenchment program at the end of August. It did not say how many of its 11,000 workers will be affected.

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