{"id":330458,"date":"2024-11-18T15:18:04","date_gmt":"2024-11-18T07:18:04","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=330458"},"modified":"2024-11-18T15:18:08","modified_gmt":"2024-11-18T07:18:08","slug":"trade-the-news-cnvrg-keen-to-buy-skycable","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/trade-the-news-cnvrg-keen-to-buy-skycable\/","title":{"rendered":"Trade the News: CNVRG keen to buy SkyCable"},"content":{"rendered":"\n
Potential Impact of this News<\/strong><\/td>NEUTRAL on the stock price<\/strong><\/td><\/tr>
Company<\/strong><\/td>Converge ICT Solutions Inc.<\/td><\/tr>
Stock Code<\/strong><\/td>CNVRG<\/td><\/tr>
Long-term Recommendation on the Stock<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 20.58<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

Tech tycoon Dennis Anthony Uy plans to buy out Sky Cable Corp. and capture its more than 300,000 subscribers as soon as the company succeeds in erasing its over P4 billion debts.<\/p>\n\n\n\n

The Philippine Star<\/em> learned from highly-placed sources that Uy is determined to save Sky Cable from the risk of bankruptcy, and his long game for the company is to turn it into a subsidiary of Converge ICT Solutions Inc.<\/p>\n\n\n\n

However, Uy \u2013 who admires the household recall of Sky Cable \u2013 thinks the company has a lot to do to improve its financial standing, from paying maturing debts to reducing business costs.<\/p>\n\n\n\n

Sky Cable owes P4.47 billion to lenders as of September, of which P3.18 billion are due in a year. Likewise, Sky Cable is running on a loss right now, booking a revenue of P4.12 billion while expenses reached P4.93 billion.<\/p>\n\n\n\n

Uy said Sky Cable can cut spending by P1 billion a year if it lowers power consumption, removes pole rental and slashes maintenance costs. This is why Uy\u2019s brainchild Converge signed a network sharing agreement with Sky Cable in July.<\/p>\n\n\n\n

Currently, Sky Cable is in the process of tapping Converge\u2019s fiber backbone \u2013 one of the widest in the Philippines \u2013 to improve service quality at lower costs.<\/p>\n\n\n\n

For Uy, the target is to migrate at least 60 percent of Sky Cable\u2019s subscriber base \u2013 which stands at more than 300,000 to date \u2013 to Converge fiber lines within the year.<\/p>\n\n\n\n

\u201cIn due time (Sky Cable would be bought out] once Uy fixes it. Sky Cable has a lot of debts right now. Once it can pay its debts and personnel, he may come in to acquire it),\u201d a source said.<\/p>\n\n\n\n

As it stands, the source said Uy has yet to find value in buying out Sky Cable, estimating that it would require a minimum of P13 billion to take over. A proposal to acquire Sky Cable may cost P6.75 billion, as it was previously priced in the scrapped deal with PLDT Inc.<\/p>\n\n\n\n

Aside from this, the buyer would have to shoulder the debts worth over P4 billion. It would also have to allocate P2 billion to sustain Sky Cable\u2019s personnel.<\/p>\n\n\n\n

In response, a senior executive of Sky Cable\u2019s parent ABS-CBN Corp. said the company is open to entertaining any proposal that would improve its business standing.<\/p>\n\n\n\n

\u201cWe are focused on strengthening Sky Cable\u2019s long-term viability and remain open to exploring opportunities that would benefit our customers, employees and stakeholders,\u201d the executive said.<\/p>\n\n\n\n

Still, analysts agree with Uy in his decision to wait until Sky Cable shows some promise that it is worth saving, warning that whoever takes over it would inherit its financial troubles, too.<\/p>\n\n\n\n

China Bank Capital Corp. managing director Juan Paolo Colet said Sky Cable may have to draw up a new business model to attract another buyer. In particular, this model should raise additional revenue and trim unnecessary expenses to enhance cash flow.<\/p>\n\n\n\n

\u201cI don\u2019t foresee an acquisition in the near future given the debt burden and legacy issues of Sky Cable. Once those have been addressed and a sustainable business model is in place, there would be a better business case for Converge to take over Sky Cable,\u201d Colet told the STAR.<\/p>\n\n\n\n

Based on its financial report, Sky Cable\u2019s net loss jumped by 13 percent to P418 million from January to September on declining subscriptions.<\/p>\n\n\n\n

Prior to this, Sky Cable used to be a stable business, until the company lost the privilege to offer direct-to-home services when Congress denied ABS-CBN\u2019s bid for a fresh franchise in 2020.<\/p>\n\n\n\n

(News Source: Philippine Star<\/a>)<\/em><\/p>\n\n\n\n

<\/div>\n\n\n\n

This report is prepared by PinoyInvestor\u2019s partner broker below. Find out more about our partner brokers<\/a> and sign up to avail their complete trading brokerage services.<\/em><\/em><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Take advantage of the price opportunity that might arise when the news hits. Trade the news!<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1371],"tags":[],"class_list":["post-330458","post","type-post","status-publish","format-standard","hentry","category-trade-the-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/330458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=330458"}],"version-history":[{"count":1,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/330458\/revisions"}],"predecessor-version":[{"id":330460,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/330458\/revisions\/330460"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=330458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=330458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=330458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}