ABS-CBN nixes preemptive rights of shareholders

MANILA, Philippines - Broadcast giant ABS-CBN Corp. is set to take in financial investors soon after it received the green light from the Securities and Exchange Commission (SEC) to remove the preemptive rights of shareholders in the stocks that would be issued or disposed of by the company.

ABS-CBN assistant corporate secretary Enrique Quiason said in a disclosure to the Philippine Stock Exchange (PSE) that the SEC has approved the amendment to the company’s amended articles of incorporation.

He said the changes involved article VII of the company’s articles of incorporation removing the pre-emptive rights of stockholders to any issuance or disposition of shares.

ABS-CBN chairman and chief executive officer Eugenio L. Lopez III earlier said the amendment would allow the company to take in financial investors to raise funds to bankroll the company’s initiatives including the impending shift to digital television as mandated by the National Telecommunications Commission (NTC).

Under the law, Lopez said ABS-CBN has to go through a tedious and lengthy rights offering process with the preemptive rights of shareholders on share issuances.

Despite the approval, the company’s chairman assured that ABS-CBN would continue to protect the interest of the shareholders as it is under the watch of the Philippine Stock Exchange (PSE).

“This amendment being proposed if approved does not, however, mean that minority stockholders are no longer protected. The PSE requires the rights offering in certain circumstances,” Lopez said.

According to him, proceeds of any fund raising activity being arranged by ING would be used to finance initiatives being undertaken by ABS-CBN such as the shift to digital TV as mandated by the government regulator.