GMA Network Inc. prepays P1.9-B loan, is now debt-free

GMA Network Inc., the country’s second biggest broadcasting network, is now debt-free after it prepaid a P1.9-billion five-year term loan, nine months ahead of the scheduled due date.

In a statement, GMA said the loan was paid using internally-generated funds. The network settled more than P543 million in principal and interest last Feb. 28.

The loan, drawn in 2000, was used to upgrade GMA’s facilities and infrastructure and improve its production capabilities.

GMA chairman, president and chief executive officer Felipe Gozon said the company does not need to go public at this time as it has enough financial resources to sustain its expansion projects.

These projects include the launch of its international channel in the US this year, as well as the on-going upgrading of transmitter and other facilities in key cities across the country geared towards improving the network’s signal and reach and gaining leadership in ratings in the provinces.

GMA has set aside P600 million for its capital expenditures this year, excluding requirements for the international channel and its agreement with the operator of Channel 11.

GMA subsidiary Citynet earlier entered into a co-production and blocktime agreement with Zoe Broadcasting Network which provides a new platform for GMA to showcase more innovative shows. The Villanueva-controlled Zoe Broadcasting operates the free-TV station Channel 11.

GMA will build two state-of-the art studios within its compound that will house more programs, including huge variety shows. GMA operates the Channel 7 VHF station.

The network has recently completed its P180.2-million broadcast automation systems project that will improve its broadcast capabilities in both local and international arenas.

GMA earlier announced that its planned initial public offering (IPO) would not push through this year pending resolution of issues between the Gozon-Duavit bloc and the Jimenez family, the three controlling shareholders of GMA Network.

The Jimenez family, which owns 35 percent of GMA, has refused to sign the shareholders agreement, specifying that control of GMA must remain with the existing shareholders. They explained that such agreement would defeat the purpose of going public.