ABS-CBN's date of reckoning is coming, effects to reverberate to entire Lopez Group

As already known by anyone, Lopeze's risk management system failed to avert the imminent risk that the legislative franchise of ABS-CBN will expire and not be renewed by the Philippine Congress.

The Lopezes' failure to secure a congressional franchise to broadcast for ABS-CBN triggered the company's default on its loans to its creditors.

Since then, ABS-CBN has been at the mercy of its creditors. ABS-CBN and its lenders agree that, upon satisfaction of the necessary conditions under the Omnibus Security and Intercreditor Agreement (the "Standstill Effective Date") and during the effectivity period (the "Standstill Period") of the standstill as specified in the Omnibus Security and Intercreditor Agreement, it shall not declare an event of default to the extent that it relates to the Franchise Expiration Default. The Standstill Period shall be from the Standstill Effective until the Long Stop Date (December 31, 2023).

The Omnibus Security and Intercreditor Agreement provides a specific condition to be met before the Long Stop Date. Non-occurrence of such requirement as of the Long Stop Date shall cause the Standstill effectivity to cease, and from as of such date, the lenders shall have the right to declare an event of default and exercise all or any of their rights and remedies as provided under the Omnibus Security and Intercreditor Agreement, including the enforcement of the security interest created under the Omnibus Security and Intercreditor Agreement.

So far, the Lopezes' management at ABS-CBN is mum on the fast-approaching date. The Lopezes at ABS-CBN even failed to update the public on the impending sale of Sky Cable to PLDT.

Should ABS-CBN be declared in default, the effects will definitely reverberate to the other operating companies controlled by the Lopezes - Rockwell Land and First Generation. How will these operating companies borrow from the banks lending money to ABS-CBN?

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