IBC 13 files corporate rehab plan

Manila Times 12 Dec 2009

STATE-OWNED International Broadcasting Corp. (IBC) filed a 15-year rehabilitation plan before a Quezon City court, as the network scouts for a joint venture to resolve financial problems.

In a filing with the Branch 93 of the Regional Trial Court of Quezon City, the sequestered radio-TV network, whose flagship station is IBC 13, said its management recognized that its huge debt ballooned to such an extent that it could no longer pay its obligations.

“On account of financial difficulties, IBC had already defaulted on the payment of its outstanding financial obligations and actions, both civil and criminal, have already been filed or are about to be filed against IBC and or its officers and directors,” the network said.

At end-October, the network’s total liabilities amounted to about P1.58 billion. Of the total amount, P1.06 billion is already due, while P722.16 million is contingent.

IBC said revenues from block-time agreements fell from over P363 million in 2002 to just over P102 million in 2008.

At end-June this year, the network incurred a net loss of P86.57 million.

If properly programmed or managed, IBC said that the network can provide P629.79 million in block time sales per year and P6.74 million in available spots for sale per year.

To revive the company, IBC is eyeing to enter a joint venture with a partner who will infuse a total of P750 million. Of this amount, P650 million will finance retirement pay, unpaid employee benefits, unpaid real property tax, among others.

The prospective partner would shoulder another P100 million for programming costs on the first year.

Out of the P650 million in advances to be provided by the prospective partner on the first year, IBC said that it projects the partner to earn an estimated P1 billion in 15 years. For second to fourth years, the network plans to spend P220 million to rehabilitate technical facilities.

To support the rehabilitation plan, IBC plans to retrench or retire current manpower, upgrade technical equipment and transmitters, improve programming to cater to advertisers and schedule payments to creditors.

Two attempts to privatize IBC were made in 2000 and in 2006, but either failed to materialize due to legal impediments.

In a statement, Jose Javier, IBC president and chief executive, said the acquisition of rival TV5 by a group led by Manuel Pangilinan of Philippine Long Distance Telephone Co. has renewed interest in broadcast operations.