GMA Network buys back PDRs

GMA Network Inc. is buying back its Philippine Depositary Receipts (PDRs) in a bid to remove foreign investors in the company.

GMA Network said in a Philippine Stock Exchange filing on Tuesday its board of directors had approved the acquisition of PDRs issued by GMA Holdings Inc. at P4.55 per share or lower until Oct. 31 this year.

This is about 46.5 percent less than their issue price of P8.50 per share in 2007.

GMA described the decision as a “measure of protection of the investments held by non-Filipinos.”

A wider investigation into PDRs issued by media companies has been set into motion by lawmakers after their rejection of rival ABS-CBN’s franchise bid.

The Constitution prohibits media companies in the Philippines from having foreign owners.

PDRs are an alternative and government-approved measure for media companies to raise money from foreigners. They instead receive dividend payments and are not assigned voting rights that regular common shares have.

After the buyback, GMA will no longer have any PDRs. GMA Network said once the purchase is completed, it would convert the PDRs into common shares.

The decision comes after a House of Representatives committee voted on July 10 to deny media giant and GMA rival ABS-CBN Corp. a new 25-year franchise after questioning, among other items, its sale of PDRs during a series of hearings.

In its filing, GMA said the issuance of PDRs “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 Corp.” INQ