THE PHILIPPINES, JULY 16. 2012: A provision in the Philippine Constitution may be the biggest hurdle for Philippine Long Distance Telephone Co.’s chairman Manuel V. Pangilinan’s takeover of GMA Network Inc.
MediaQuest Holdings, PLDT’s affiliate, would most likely acquire GMA’s common shares, while PLDT would pick up Philippine Depository Receipts, a form of equity reserved for foreigners. But under the Philippine Constitution, foreigners are not allowed to have voting shares in media companies.
PLDT is controlled by Hong Kong’s First Pacific Co. Ltd. and Japan’s NTT DoCoMo. But MediaQuest is owned by PLDT’s Beneficial Trust Fund, which would allow the group to skirt restrictions on foreigners.
Although PLDT and the Duavit, Gozon, and Jimenez families that control GMA7 expect to work out an agreement at the end of 2012, they still need to get approval from both houses of Congress and the National Telecommunications Commission (NTC).
Despite the impending delay, Pangilinan said preparations are ongoing to raise cash to pay for the majority stake in GMA, if and when both camps agree.
MediaQuest Holdings controls other key assets such as, Associated Broadcasting Corp., operator of GMA’s rival television network TV5.
Source: Inquirer.net
