ABS-CBN to offer 1B preferred shares

ABS-CBN CORP. plans to offer a billion voting preferred shares to existing shareholders equivalent to 56.7 percent of its total shares in this December.

The plan is part of the Lopez- led broadcasting firm’s capital restructuring.

In a disclosure to the Philippine Stock Exchange on Thursday, ABSCBN said it would issue the preferred shares at P0.20 each for a of P200 million. The issue price was set at the par value, in line with outstanding voting preferred shares of other listed Philippine companies.

The company’s restructuring involves the reclassification of 200 million issued common shares into one billion voting preferred shares. This will enable ABS-CBN to use the leeway in its authorized capital to accommodate the issuance of new shares.

Some analysts said this would also give ABS-CBN the flexibility to sell common shares in the future without the Lopezes losing a controlling stake.

The preferred shares will be cumulative, voting, non-participating, redeemable and non-convertible. The dividend rate for the preferred shares will be fixed by the board prior to the issuance of the preferred shares. It was also proposed that ABS-CBN would have the right of first refusal to acquire the preferred shares at its issue price if the holders would sell their shares in the future.

ABS-CBN does not intend to list the preferred shares on any exchange.

To pave the way for the capital restructuring, the broadcast company will convene a stockholders meeting on Nov. 15.

The shares will be offered from Dec. 3 to 14 this year.

ABS-CBN is 57.24-percent owned by Lopez Inc.