GMA Network is trying to avoid trouble after the denial of ABS-CBN’s franchise application by buying back the Philippine Depositary Receipts (PDRs) it sold to investors.
In a disclosure to the Philippine Stock Exchange (PSE) Tuesday (August 11), GMA Network said the buyback of PDRs was decided during a special meeting of the board of directors.
“RESOLVED, AS IT IS HEREBY RESOLVED, that as a measure of protection of the investments held by non-Filipinos in the Philippine Deposit Receipts (PDRs) issued by GMA Holdings Inc. pursuant to the registration of such securities with the Securities and Exchange Commission, and listing at the Philippine Stock Exchange, as might be affected by the findings and recommendations of the Technical Working Group as adopted by the House of Representatives Committee on Legislative Franchises on the application for a new franchise of ABS-CBN Corporation, the Corporation shall purchase and acquire such PDRs at the closing price or lower of the PDRs at today’s market i.e. Php 4.55, effective immediately and up to October 31, 2020,” the network said.
GMA said it will convert the PDRs into common shares after buying them back from investors.
ABS-CBN’s sale of PDRs to foreign investors was one of the reasons cited by the House legislative franchises committee for denying its franchise application.
In a 40-page report, the technical working group created by the committee said ABS-CBN appeared to have utilized PDRs “to allow foreign ownership” in the network, in violation of the 1987 Constitution.
The Securities and Exchange Commission (SEC) said in one of the committee’s hearings last June that there’s no difference between the PDRs issued by ABS-CBN and GMA Network, except for the price.