The board of GMA Network Inc. on Tuesday approved to buy back the Philippine depositary receipts (PDRs) it issued to protect its non-Filipino investors.
In its disclosure, GMA said it will buy back the said PDRs, issued by GMA Holdings Inc., as these “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.”
The two television networks both have PDRs, which were offered to foreign investors. It was a hot-button issue during the recent hearings at the House of Representatives on ABS-CBN’s renewal of franchise as broadcast media should be exclusively owned by Filipinos. The lower chamber eventually thumbed down ABS-CBN’s bid to renew its franchise.
A depositary receipt is a negotiable certificate issued by a bank representing shares in a foreign company traded on a local stock exchange. It gives investors the opportunity to hold shares in the equity of foreign countries and gives them an alternative to trading in the international market.
GMA said it will buy its PDRs at Tuesday’s closing price or lower at P4.55 per share. It will buy the shares immediately through October 31.
“After the purchase and acquisition of the PDRs in accordance with the foregoing resolution, the corporation shall convert the said PDRs into common shares,” the company said.
GMA has 719.66 million outstanding PDRs listed at the Philippine Stock Exchange. It closed at P4.56 per share.