The Bank of the Philippine Islands, one of the creditors of the Uniwide Group of Companies, is asking the Securities and Exchange Commission (SEC) to junk the proposed amended rehabilitation plan of the retail and property firm.
In its comments submitted to the SEC, BPI said the rehab plan crafted by the interim receivership committee contains unreasonable terms that are unacceptable and way below the standards of sound banking practice.
BPI's total exposure as of February this year is P943.323 million in Uniwide Holdings Inc. (UHI), Uniwide Sales Realty & Resources Corp. (USsrc) and Uniwide Sales Inc. (USI). The loan exposures covering the Uniwide group have long been past due and are secured by first mortgages over specific real properties of USsrc and UHI.
BPI said the plan calling for a 20-percent discount on a cash payment to be made on BPI's total exposure in UHI and USsrc assumes a waiver of interest charges after June 30, 1999 and a complete waiver of penalties and other contractual charges.
BPI added it is inaccurate to say the discount will amount to just 20 percent of the total exposures in UHI because in actual terms, accepting a cash payment of P243 million will mean a loss of P89.7 million excluding penalties and other contractual charges. This translates to a 27 percent discount which will be detrimental to BPI's shareholders and depositors.
Also, the term sheet for BPI is prejudicial to the bank because BPI is a secured creditor which provided credit to some of the petitioning corporations on Uniwide's word that it could freely foreclose on the assets mortgaged to if it defaults on their obligations.
BPI said the SEC should recognize that the bank gets preferential status when it comes to prioritizing payments, citing specific provisions of the Civil Code. BPI said it has superior mortgage lien over two operating assets of the Uniwide Group. These are the Avenida and Libis properties.
The BPI said the justification of the receiver that the 20-percent discount forced on creditors should take the place of the fees and tax expenses that these creditors would incur had they opted to foreclose the mortgages in their favor is untenable. It fails to recognize that creditors could foreclose without giving up their right to claim for the deficiencies from their debtors.
On the proposal to satisfy BPI's exposure in UHI through a decision en pago or payment in kind of Metromall Special Purpose Co. shares totalling P416.3 million in addition to about P24.6 million for dacion expenses needed for the release of the mortgage participation certificates granted to a syndicate of banks on the Coastal Mall project, the plan assumes that Philippine National Bank and Allied Bank would allow BPI to participate in the use of the collateral where these banks hold preferred positions.
"That PNB and Allied Bank would agree to a novation of the obligations to them of Uniwide is highly unlikely and at best, speculative."
Other creditors of Uniwide such as Land Bank and East West Bank have also opposed Uniwide's amended rehab program for similar reasons.