Beyond Cable in negotiations with prospective investors

Beyond Cable, the holding company of SkyCable and Home Cable, is now in active talks with certain groups to put in new money into the business in the immediate term.

Central CATV (SkyCable) chairman Eugenio Lopez III revealed that the infusion of new funds is one of the conditionalities in the debt restructuring agreement that will be signed between the cable companies and their respective creditors very soon.

As this developed, it was disclosed that Beyond Cable will pursue discussions to acquire Destiny Cable from the Lim family, despite initial problems as far as valuation is concerned.

Sky and Home account for 70 to 80 percent of the cable TV market while Destiny has a five to 10 percent share. Destiny’s share has gone down substantially, especially after the Star Group which distributes the more popular cable TV channels (ESPN, Star Sports, Star Movies, Star World, etc.) pulled out these channels from Destiny.

Destiny officials earlier revealed that the discussions with Beyond Cable has ended in a stalemate due to disagreements as to pricing.

However, Lopez expressed confidence that eventually, this problem will be resolved. "Anyway, the discussions are still ongoing. It makes sense to consolidate. They (Destiny) spent P3 billion for infrastructure and they are not making money," he said.

SkyCable, owned by the Lopez group, and Home Cable which is owned by PLDT-subsidiary Mediaquest consolidated operations in 2001 to improve efficiencies and save on redundant costs.

Meanwhile, Lopez disclosed that the debt restructuring discussions with the creditors, involving around P2 billion for both Sky and Home, are almost done and is already in the final stages. "We expect to conclude the talks before the end of this month," he disclosed.

He explained that the memorandum of agreement to be signed between the cable television companies and the creditors is premised on the infusion of new funds into the business by a third party.

The SkyCable top official pointed out that at this point, both the Benpres Group (for SkyCable) and the Philippine Long Distance Telephone Co. (for Home Cable) are not in a position to infuse new funds into their respective cable companies.

Lopez, however, refused to divulge the identity of the prospective investors as well as the amount involved.

Part of the new funds, he said, will be used to invest in addressable set-up boxes which according to Lopez is the only way to stop cable TV piracy. It is estimated that Sky and Home will have to spend at least P200 million to go into tiering of its offerings.

These "boxes" will be attached to each television set that has a cable connection and can be programmed. Once the boxes are installed, cable TV subscribers of Sky and Home will be asked to choose from several packages, each of which will have a different pricing as well as cable channels.