Sky-Home starts talks with possible investors

The merged SkyCable-Home- Cable has begun discussions with one foreign and one local group on the possibility of investing in both primary and secondary shares of Beyond Cable, the holding company of the country’s two biggest cable firms.

This brings to four the number of potential investors that have expressed serious interest in putting in both fresh funds and technical expertise into the cable company.

SkyCable, owned by the Lopez group, and HomeCable of the PLDT group earlier this year merged operations with the Lopezes owning around 66.67 percent and PLDT, 33.33 percent. As part of the agreement, the Lopez group will sell half of their shareholdings (33.33 percent) consisting of secondary shares to a third party strategic investor.

In order to further raise funds, Beyond Cable will also be issuing new primary shares, proceeds of which will be plowed back to the cable business.

In an interview, Beyond Cable chief operating officer Carlos Tria told The STAR that management, together with financial advisers ING Barings and Bear Stearns, met with two of the investors and information about SkyCable-HomeCable pertaining to projected revenues and cashflow and the business plan were discussed.

One of the companies, according to Tria, is based in the Philippines, while the other one is foreign-based and just sent over a representative. "They (prospective investors) are in the process of digesting the information that we gave them. They will then prepare a framework document that will state the parameters of our future discussions," he said.

He also said that negotiations with the two other groups will begin next month. "Hopefully we will start serious discussions with all four during the first quarter of next year and then have an agreement by the second quarter of 2002 at the latest," Tria revealed.

SkyCable and HomeCable were earlier estimated to have a combined value of P14.5 billion, but according to Tria, this amount was simply based partly on the valuation placed by PLDT when it first purchased Home- Cable.

He revealed that during the discussions with the prosepective investors, they have not placed a valuation. "This is a subject matter for the negotiations and this will come in during the later stages of the talks," he emphasized.

Tria said that the prospective investors have expressed interest both in the primary and secondary shares that will be sold by Beyond Cable.

When asked how much new primary shares will be issued, he pointed out that the percentage is still open at this point.

The cable group has also presented its business plan to its creditors, but Tria said that they have yet to receive feedback from them.

Sky and Home, which account for the bulk of the cable television market in the Philippines, have been losing money for some time now due to the increasing costs of programming which is dollar-based.