PLDT to sell its minority stake in Central CATV

Telecommunications giant Philippine Long Distance Telephone Co. (PLDT) is keen on selling its minority stake in Central CATV Inc., the leading cable television company in the country.

PLDT chairman Manuel Pangilinan told The STAR that they are just waiting for the right offer to come along.

Highly placed sources said PLDT wants to dispose of its cable TV holdings before it enters the competing direct-to-home (DTH) satellite TV business before the end of the year in partnership with US DTH giant Echostar Communications and local DTH licensee GV Broadcasting Systems. The planned acquisition of GV Broadcasting may coincide with the signing of the joint venture agreement with Echostar.

Mediaquest Holdings which focuses on media-related opportunities is the investment vehicle of PLDT’s Beneficial Trust Fund. It owns a 33.5-percent interest in Central CATV, which in turn owns Sky Cable and Home Cable. The remaining 66.5 percent is controlled by the Lopez group.

Mediaquest also owns a 51-percent interest in Nation Broadcasting Corp. (NBC), which owns an FM radio channel and a UHF television channel MTV. It also recently acquired a 30-percent stake in BusinessWorld Publishing Corp.

Official sources said PLDT’s 33.5-percent stake in Central CATV has been diluted to as low as seven percent, following the conversion to equity of a loan earlier extended by another Lopez-controlled company, ABS-CBN Broadcasting Corp., to Sky Cable.

The same sources said the conversion however is facing delays due to the refusal of the PLDT group to sign the documents.

Pangilinan said he is not aware that PLDT’s 33.5-percent interest has been reduced and that the ABS-CBN loan has been converted to equity. "But I don’t think it will be down to less than 10 percent," he told The STAR.

The Lopez group earlier offered PLDT the right to retain its 33.5- percent share in Central CATV by paying off 33.5-percent of the ABS-CBN loan, but Pangilinan said the PLDT group was no longer interested in putting in additional money into the cable tv business.

Mediaquest, which used to own Home Cable, also sold the latter‚s assets to Central CATV, which resulted in a merger, both in the operations and equity side, of Sky Cable and Home Cable. Central CATV shares were used to compensate Mediaquest, resulting in the PLDT group owning the 33.5-percent share in the holding company.

Pangilinan said that he has not received any offer from the Lopez group to acquire PLDT’s stake in Central CATV. "But if they want to acquire it for the right price, why not?," he said.

PLDT earlier offered to exchange its Central CATV shares for ownership of Lopez-owned Bayan Telecommunications (BayanTel) but the offer was rejected by the Lopezes.

STAR sources revealed that PLDT hopes to time its planned exit from the cable television business with its impending entry into the direct-to-home (DTH) satellite TV business, which is currently monopolized by Dream Satellite of businessman Antonio "Tonyboy" Cojuangco.

PLDT and GV, which PLDT plans to acquire soon, are entering into a 60 to 40 joint venture with Echostar for the launch of an $85-million direct broadcast satellite service by the end of the year.

PLDT resorted to acquiring GV Broadcasting’s franchise after negotiations to purchase Dream Broadcasting operator Philippine Multi Media Systems Inc. (PMMSI) from Cojuangco failed.