ABS-CBN sells part of HQ to Ayala Land for P6 billion

Proceeds to be used for debt payment

MANILA, Philippines — The Lopezes are selling more than two-thirds of their ABS-CBN Corp. property in Quezon City to the Zobels to raise over P6 billion for the payment of outstanding debts.

ABS-CBN yesterday said it is turning over 30,000 square meters of its 44,027.3-sqm property in Quezon City to Ayala Land Inc. (ALI) for P6.24 billion.

The sale marks one of ABS-CBN’s largest fundraising activities to nurse its financial health, which started to deteriorate after the company lost its legislative franchise in 2020.

Awaiting clearance from the Philippine Competition Commission, ABS-CBN will hand over the property to ALI on an installment basis. The property houses a number of ABS-CBN’s buildings, including production facilities, where it used to tape the shows it aired on free TV.

Once the transfer is complete, ABS-CBN will consolidate its offices and studios on the remaining 1.4 hectares. The company, which used to dominate free TV, said proceeds of the sale would be used to pay maturing loans.

ALI will place a downpayment in an escrow account to be issued to ABS-CBN upon delivery of certain conditions and requirements and the signing of the deed of absolute sale.

As agreed, ALI will pay the balance on an installment basis over a period of 10 years.

As of September 2024, ABS-CBN owes P16.32 billion to lenders, with the amount also covering P4.47 billion in debts piled up by broadband unit Sky Cable Corp.

ABS-CBN has a loan covenant with creditors that requires the company to possess a legislative franchise to operate certain businesses. When lawmakers denied ABS-CBN’s franchise in 2020, it was then that the financial struggle started, leading to the non-payment of loans.

To minimize business costs, ABS-CBN disposed of several of its assets to also raise capital for debt payment. Moreover, the company is seizing opportunities in the era of digital streaming, partnering with online channels such as Netflix and Viu to reach a wider audience.

As a result, ABS-CBN trimmedits net loss by 22 percent to P2.59 billion between January and September 2024, from P3.33 billion during the same period in 2023.

Still, ABS-CBN is feeling the pang of its financial decline, laying off around 100 workers before the end of the year as part of cost-cutting measures.