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Lopez buys out Sun Cable, prepares for SkyCable share sale


MANILA, Philippines - The Lopez family now fully owns Sun Cable following itsacquisition of the Lorenzos’ 47% stake, a move that will allow it to merge the brand with its other cable network — SkyCable — and make the latter more attractive to investors. The consolidation is expected to cut operational costs, expand SkyCable’s reach and increase market share in preparation for its listing on the stock exchange, said Eugenio Lopez III, chairman of ABS-CBN Broadcasting Corp. The television network bought the Lorenzo family’s interest in Pilipino Cable Corp. (PCC) for P900 million last week using a loan from Banco de Oro. PCC is the operator of the Sun Cable brand in key cities outside Metro Manila. "We’re already in a position to go public with our bigger share, but we’re waiting because the market is bad," Mr. Lopez told reporters last week. He said the purchase would result in economies of scale, allowing them to consolidate assets such as satellites, as well as operations, such as the rollout of digital encryption service to reduce cable signal theft. ABS-CBN held 53% of PCC before the purchase of the Lorenzos’ stake. SkyCable mainly operates in Metro Manila, while Sun Cable covers cities and municipalities in Cebu, Iloilo, Baguio, General Santos, Tagum, Naga, Cavite, Ilocos region, Pangasinan and Bulacan. SkyCable returned to profitability last year, when it posted P122.6 million in profits following an increase in subscription revenues and after getting rid of illegal subscribers. The cable network started tracking down illegal connections with the help of local governments in 2005. Between 2005 and 2007, it disconnected 150,000 illegal cable TV lines. Mr. Lopez earlier said they were seeking to raise more than P3 billion to increase SkyCable’s market share as it adds 40,000 more digital boxes to the existing 65,000 units. SkyCable, the largest cable TV service provider, has cornered 43% of the country’s estimated one million cable satellite subscribers today. In 2001, SkyCable consolidated its assets with Philippine Home Cable Holdings to cut programming costs because of the peso’s depreciation against the dollar and increased investments in network expansion and upgrade. SkyCable is a direct-to-home cable TV and subscription service established by the Lopez group and Central CATV group. It is one of several subsidiaries of ABS-CBN. SkyCable’s closest competitor in Metro Manila is Global Destiny Cable. Both have their own affiliates nationwide and both provide their own cable Internet services to subscribers. - BusinessWorld