ABS-CBN tells the Supreme Court it may also not be able to service its debts as it halts operations
ABS-CBN is losing around P30 million to P35 million every day that it is off the air.
In its petition for certiorari filed before the Supreme Court on Thursday, May 7, the media giant said its immediate losses, equivalent to over P1 billion a month, would be due to lack of advertising revenues. (READ: ABS-CBN to Supreme Court: NTC shutdown violates press freedom)
ABS-CBN added that it would incur a lot more and may not be able to service its debts.
“Because of the CDO (cease and desist order), ABS-CBN will not be able to service its debts, and this would constrain its creditors to require collateral for its loans,” ABS-CBN said.
“ABS-CBN has, in fact, already received a notice from a bank demanding such collateral. Its credit lines and letters of credit had already been adversely affected, thereby seriously hampering activities which require such financing,” it added.
ABS-CBN's financial problems come at a time when most Philippine businesses are bleeding cash amid the coronavirus crisis.
Due to the National Telecommunication Commission's order, ABS-CBN was forced to move some of its programs to its other platforms like Facebook and The Filipino Channel, as airing there do not require a congressional franchise.
The network added that the “injury” inflicted by the NTC's order may be “irreparable” and the network may not be able to recover from the losses.
ABS-CBN’s chief financial officer Ricardo Tan Jr earlier told the Inquirer that it will honor its debts.
“We have been in touch with our creditors and also assured them that we will be servicing all our debts according to the existing payment schedules,” Tan said in the article.
From January to September 2019, ABS-CBN’s net income stood at P2.36 billion, 45% higher year-on-year on the back of higher revenues of P32 billion.
Over half of the revenues came from advertising, which amounted to P17.11 billion.
As of the 3rd quarter of 2019, ABS-CBN’s long term debts to banks amounted to P21.2 billion, P259 million of which is due in 2020.
Despite the massive blow to its finances, ABS-CBN chief executive officer Carlo Katigbak committed to pay all of its 11,000 workers for the next 3 months and assured employees no one will be let go. This was confirmed by several news personalities and employees in various social media posts, as well as confirmation to Rappler.
Tthe Philippine Stock Exchange suspended trading of ABS-CBN shares following the NTC order.
The NTC ordered ABS-CBN to cease operations on Tuesday, May 5, as its franchise expired the day before. The NTC had promised in March that it would grant the network provisional authority to operate while Congress deliberated on bills seeking an ABS-CBN franchise renewal.
There were at least 9 bills pending in Congress for the media network's franchise renewal.
Speaker Alan Peter Cayetano, who has been blamed for the ABS-CBN shutdown because he had shelved the bills, on Friday pointed to Solicitor General Jose Calida and the NTC instead.
Two days before the NTC order, Calida warned it against granting ABS-CBN provisional authority to operate while the renewal of its franchise is pending in Congress. Calida had filed a quo warranto petition in February, seeking to stop ABS-CBN's operations.
The shutdown on May 5 has been met with criticism, with rights groups, media workers, labor groups, and lawmakers denouncing the move as abuse of power and a threat to press freedom.
President Rodrigo Duterte has repeatedly slammed the network over alleged swindling and unfair election coverage, and had said that he would see to it that ABS-CBN would not get a franchise renewal.
https://www.rappler.com/business/260298-abs-cbn-losing-millions-per-day-off-air
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