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GMA-7 sets July IPO
(Business World (Philippines) Via Thomson Dialog NewsEdge)Angeles, Pampanga - A top executive of GMA Network, Inc. (GMA-7) said the company may sell approximately 20% of its shares through initial public offering (IPO) most likely by July after more than a year of delay.
GMA Network President Felipe L. Gozon said the amount of shares to be sold is not yet definite and this may still increase pending discussions.
Another issue to be resolved is how much of these shares will be covered by Philippine Depositary Receipts (PDRs) and how much are earmarked for foreign investors and for an employees' stock option, he added.
He said the much-awaited IPO of the network giant had been delayed due to new accounting rules which required them to review their books from 2003 up to present.
The company has chosen ATR-Kim Eng and Deutsche Bank as underwriters for the offer.
Mr. Gozon however said the firm does not need IPO proceeds to finance their expansion activities, as the cash-rich company is able to finance these internally.
He said the IPO will be conducted in order to allow employees to share the benefits of the company's progress. He also said this will allow aging stockholders to transfer their shares to their heirs sans costly inheritance taxes.
He said the company will spend around P900 million for new infrastructure in Metro Manila and in the provinces.
The company's net income last year was P2 billion, around 33% higher than P1.5 billion in 2004. Gross revenues hiked 25% to P9.5 billion from P7.6 billion during the same period.
Mr. Gozon also said that GMA-7 is not yet keen in purchasing either Rado Philippines Network, Inc. (RPN-9) or Intercontinental Broadcasting Corp. (IBC-13).
While he said that the company has not yet seen the value of purchasing the government-sequestered stations, but said "do not rule us out" of the sale.
"If it will give us value, we will buy it," he said.
Speaking before reporters in a seminar at Clark Field, Mr. Gozon said the firms' liabilities are more than their assets. He said buyers do not find value in buying a net liability.
He added that even government advisers are not sure yet on how to go about the privatization of the two sequestered stations.
The privatization of government television networks Radio Philippines Network, Inc. (RPN-9) and Intercontinental Broadcasting Corp. (IBC-13) will be held in the second quarter,
Privatization Management Office head Jose AR Bengzon III previously said that the privatization of RPN-9 and IBC-13 will be held in the second quarter. He said the valuation report by CLSA Exchange Capital, RPN and IBC's financial adviser, had already been approved by the Privatization Council.
Telecommunications executive Manuel V. Pangilinan is said to be looking for a partner to help him buy and operate RPN-9, and GMA-7 was supposedly seen as a potential partner, according to industry sources.
Mr. Pangilinan has been keen on acquiring a TV network as early as 2001. He had planned on buying into the GMA Network, but negotiations with GMA owners had bogged down. His business group already operates the nationwide network of FM and AM radio stations of Nation Broadcasting.
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