GMA Network Takes Back PDRs From Foreign Investors

GMA Network Inc. has taken back the Philippine Depository Receipts (PDR) it issued to foreigners who invested in the company.

A PDR, according to the Philippine Stock Exchange (PSE), is a security that grants the holder the right to the delivery or sale of the underlying shares of stock.

According to a report from Radyo Pilipinas Uno, majority of the Board of Directors of GMA Network Inc. made the decision to protect the company and its foreign investors. The board decided to acquire all the PDRs from GMA Holdings Inc. for P4.55 per share, or for a lower value, until October this year.

It can be recalled that issuing PDRS to foreign investor was one of the main reasons why Congress denied the franchise renewal of GMA rival ABS-CBN.

Since the 90's, corporations in the Philippines issue PDRs as a way to raise additional capital mostly from foreigners. However, these companies insist that a PDR not an evidence of ownership of a corporation so as not to violate the nation's Constitution.

Section 11, Article XVI of the 1987 Constitution states:

The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly owned and managed by such citizens.

Under the Constitution, foreign ownership in media companies in the country is strictly prohibited.

GMA Network earned praises from known personalities as well as netizens for their decision to take back the PDRs it issued to foreign investors.

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