"We may sell a portion of the company to the public and to our employees, maybe when the company’s value has doubled," the official said.
Now the country’s most profitable broadcasting station after chief rival ABS-CBN Broadcasting posted a first quarter 2005 loss of P114 million, its first since it went public, GMA has an indicative value of between P28 and P33 billion.
But ABS-CBN chairman and CEO Eugenio Lopez III says he is looking forward to ending 2005 in the black despite the first quarter net loss. He said cost-cutting would offset a projected decline in advertising income as a result of an economic slowdown. "We’ve had a rude awakening," he said.
GMA registered profits of P1.5 billion last year from about P1 billion in 2003 and expects continued growth this year, officials said.
GMA announced in March this year that it had suspended its planned initial public offering (IPO) supposedly scheduled sometime September this year due to disagreements among its current shareholders as well as weak market conditions.
In a statement, the company said the IPO was indefinitely postponed "until certain issues between the majority and minority shareholders are satisfactorily resolved." These comments were not explained.
However, sources said the disagreement was in connection with a conditionality being imposed by the Gozon and Duavit families that would prevent the PLDT Group, which has long expressed interest in acquiring control of GMA-7, from taking over via the IPO. The condition was opposed by the Jimenez family.
GMA had planned to raise P9 billion ($164.5 million) in an IPO, which was supposedly among a slew of big-ticket offerings expected in the local market this year.
The company which owns and operates GMA-7 was planning to sell between 20 to 30 percent of its shares to the public. GMA’s franchise requires it to list a minimum requirement of five percent and 30 percent as the maximum.
"Financially, we don’t need to do it. We have enough money. We even declared cash dividends. But we are a broadcast firm. And it is better if the public has equity interest. And, of course, it will allow shareholders to get some returns for their investments. Shareholders have been holding their stakes since 1974," Gozon earlier said.
Under the planned IPO, each shareholder will have to divest their shares and that would then correspond to a dilution in their shares.
"We will have at least 50 + 1 percent stakes. I will not lose control of the company. Primary or IPO will go to the company. Secondary offering will go to the shareholders. It will have an American depository receipts component," he said.
Currently, the Gozon family holds a 30-percent stake in the company while the Duavits and the Jimenezes owns 35-percent stake each.
The company earlier said that the funds to be generated from the IPO would be used for future expansion plans although it maintains it has enough internally generated funds to sustain its current expansion projects, including the launching of its international channel in the US this year, as well as the ongoing upgrading of transmitter and other facilities in key cities across the country.
GMA Network through its subsidiary, Citynet, has also entered into a co-production and blocktime agreement with Zoe Broadcasting Network which owns and operates Channel 11. Zoe will make available to GMA its entire airtime while the latter will provide the programs.