GMA Network to push expansion program, IPO

Clark Airbase, Pampanga – GMA Network Inc. plans to intensify its expansion program here and abroad as it prepares to push through with the listing of about 20 percent of its capital stock in the Philippine Stock Exchange this July.

GMA Network chairman and president Felipe Gozon, told reporters who attended the annual San Miguel Corp.-Economic Journalists Association of the Philippines (EJAP) seminar that the network would spend about P200 million for new infrastructures in Cebu, Iloilo, Davao and Dagupan alone.

He said the improvement of facilities in Dagupan alone would entail an investment of about P40 to P50 million. These will include the purchase of lands, transmitter and antenna.

According to Gozon, another P500 million is expected to be spent for the setting up of two state-of-the-art studios near its headquarters in Quezon City. These studios will be able to accommodate an audience of 1,500. The network expects to bid out the contract for the studios before the end of this month.

In the international front, Gozon said they will expand their presence in the Middle East, including Israel; Europe; Hong Kong, Australia and Canada. "We are hoping that we could establish our presence in these parts of the world within the year," he said, adding more revenues, are expected to come from two new stations of the company, namely Q-TV Channel 11 and GMA-Pinoy TV (international channel).

Originally, GMA Network had planned to undertake an initial public offering (IPO) in May this year, but Gozon said July would be a more realistic target.

However, he declined to give the amount they hope to raise from the IPO.

"We still need to undergo international roadshows by May. By this time, we would be able to firm up the figures. We are not yet sure if we would be offering only 20 percent. We also do not have the price for our share," he said.

The GMA Network chief executive, however, pointed out that they do not need the proceeds from the offering to finance their expansion program.

"We are not undertaking the IPO to raise funds to finance our expansion." We are going to conduct the IPO because we want our audience and employees to accrue from whatever progress we will have in the future," he said.

He said another reason for holding the IPO is to provide an appropriate means for the aging stockholders to transfer their shares to their respective heirs without paying exorbitant taxes.

Listing its shares in the PSE would also help professionalize the company’s management, Gozon said, adding that this is the right time to list their shares.

"The level of the stock exchange has never been higher," he said.

In 2005, GMA Network posted a net income of P2 billion from P1.5 billion in 2004 and P1 billion in 2003.

Its total assets have been steadily growing to P9.5 billion in 2005 from P8.5 billion in 2004 and P7 billion in 2003.

At present, the company has an authorized capital stock of P5 billion of which P4.25 billion has been subscribed and paid-up.