(Bloomberg) -- Philippine media company ABS-CBN Corp. has agreed to acquire 35% of free-to-air television company TV5 Network Inc., while selling stakes in its cable television service partly to fund the deal. 

ABS-CBN will buy shares in TV5 for 2.16 billion pesos ($38.9 million), the companies said in a statement released Thursday. The stake of media conglomerate MediaQuest Holdings Inc., owned by PLDT Inc.’s trust fund, in TV5 will be reduced to 64.8%. 

In 2020, ABS-CBN was ordered by government to shut its free TV and radio stations after its franchise expired. It since has been airing some of its shows on TV5 and other networks. 

ABS-CBN will also invest in TV5 convertible notes worth 1.84 billion pesos, allowing it to acquire additional shares that could boost its stake in the TV network to 49.9% after eight years, according to the statement. 

The transaction is expected to close this month. ABS-CBN shares closed 5.1% higher Thursday, outpacing the Philippine stock index’s 3.2% gain. PLDT rose 1.7%. 

“This partnership is consistent with the strategic intention of ABS-CBN to evolve into a storytelling company whose goal is to reach as wide an audience as possible,” ABS-CBN President and CEO Carlo Katigbak said. 

PLDT separately also announced that Cignal Cable Corp. will buy 39% of ABS-CBN unit Sky Cable Corp. for 2.86 billion pesos. 

Cignal Cable, a unit of MediaQuest, will also acquire exchangeable debt instruments and convertible notes, giving it an option to raise its stake in Sky Cable, according to the announcement. Proceeds will partly be used to pay ABS-CBN’s investment in TV5.

(Updates share price moves in fifth paragraph.)

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