With the assignment of all its assets to Lopez-owned Sky Cable, Home Cable will in effect be a shell company, owning shares in Sky Cable which the latter will be issuing in exchange for the Home Cable assets.
Highly placed sources told The STAR that the two companies are now in the process of valuing the assets of Home Cable as well as how much new shares Sky Cable will have to issue to Home Cable.
After the deed of assignment is signed, the consolidation of Sky Cable and Home Cable which have a combined market share of around 80 percent will be up for government regulatory approvals, such as from the National Telecommunications Commission (NTC).
The shares of the Lopez and PLDT groups in Sky Cable will be held by a holding company known as Beyond Cable.
The same sources revealed that the transfer of Home Cable’s assets to SkyCable is one of the conditions for the restructuring of about P2.6 billion in combined debts of the two CATV firms.
Home Cable is owned by PLDT through Mediaquest/Unilink while Sky Cable is owned by the Lopez group through Sky Vision.
Beyond Cable is currently owned 66.67 percent by the Lopez group and 33.33 percent by PLDT. Sources said the Lopezes have not abandoned plans to sell half of their stake in Beyond Cable to a third party but this will have to wait until after the restructuring agreement is signed.
Inspite of the consolidation, Sky Cable and Home Cable services will continue to be offered separately to the public.
Simultaneous with the signing of the debt restructuring agreement, Lopez-owned ABS-CBN Broadcasting will pour $30 million into Sky Cable which will be used to update interest payments to the banks and for use in operations to improve the viability of the cable business. The infusion of new money was a condition set by the banks for the restructuring.
Reliable sources said ABS-CBN is now securing the approval of its own creditors in order to acquire new loans for Sky Cable. The $30 million is convertible into equity.
The STAR learned that seven of the 14 creditors involved in the Sky-Home debt restructuring negotiations are also existing creditors of ABS-CBN. "Thus, ABS-CBN is confident that its creditors will give their nod to the new loans. Their own creditors have a personal stake in the success of Sky Cable," a source said.
Another source said ABS-CBN has a ready commitment from its funding source for the $30 million and that the amount will be released as soon as the restructuring agreement is signed.