In a Sept. 3 disclosure, ABS-CBN said it was able to secure a P3-billion exchangeable notes facility with majority of its short-term creditors to refinance its current loans and for working capital needs.
The company added while it estimates at least 88 percent of its total short-term loans will be covered by the facility as it expects more creditors to take part in the loan restructuring, two of its creditor banks – BNP Paribas and Standard Chartered Bank – did not participate and have, in fact, demanded payment from the company.
BNP Paribas and SCB, which have loan exposures of $3.6 million and P100 million, respectively, wrote the PSE to point out that ABS-CBN failed to mention in its disclosure that it has been in default since Aug. 30, 2002.
"Although the word default was not explicitly used in the statement, in essence and in content, our disclosure conveyed the facts constituting default," ABS-CBN director for finance Oliver Calma explained to the PSE.
In the Sept. 3 disclosure, Calma said: "Until recently, all existing short-term creditors of ABS-CBN have graciously allowed the extension of the maturity of their credits, as long as interest payments are current and all short-term creditors are maintained on a pari passu basis on loan payments."
He added that the two banks have indicated that they are not participating in the facility and "have given notice" for the payment by ABS-CBN of the amounts due under the relevant loan agreements with said banks."
Calma said the amounts due these banks represent only about one percent of the total consolidated assets of ABS-CBN and seven percent of its total short term loans.
In another development, ABS-CBN is expected to report a lower net income this year due to higher depreciation costs and finance charges and the impact of lower advertising spending.
Randolph Estrellado, vice-president for finance of ABS-CBN, said the company’s bottom line will be affected by the continued slump of the advertising industry as companies have decided to cut on advertisement costs to stay alive. – With Zinnia dela Peña