Allied Bank bucks amended rehab plan for Uniwide

One of the principal creditors of the Uniwide Group of Companies, Allied Banking Corp. (ABC), is opposing the amended rehabilitation plan of the debt-saddled retail company, particularly the conversion of some of its debts into condominium shares in Uniwide Metromall in Las Piñas and the Coastal Mall along Roxas Boulevard.

ABC said the plan impairs the rights of secured creditors. Under the plan, creditors secured with operating and non-operating assets will be paid partially in cash with a discount of 20 percent of appraised values, and dacion en pageo, which will be effected through the creation of special purposed corporation (SPC).

Specifically, the plan proposes to convert the Uniwide Metromall currently mortgaged with ABC and the Philippine National Bank, into a condominium, the shares of which will then be distributed to the creditors as payment for the outstanding debt.

However, the value of the Warehouse Club area within the Metromall will be carved out of the total value of Metromall and the balance will be given by way of dacion to PNB and ABC. Also, the plan intends to integrate into the Metromall collateral the Coastal Mall syndicate, composed of the Bank of the Philippine Islands, Bank of the Philippine Islands-Trust, Rizal Commercial Banking Corp., Asian Bank and East West Bank, for the purpose of enhancing the latter's collateral into a more solid one as against the leasehold rights they currently hold.

ABC said the plan is not viable because it impairs the rights of secured creditors who are left to forego their respective securities and compelled to accept condominium shares.

The plan, ABC said, "unduly and unfairly lumps creditors holding mere leasehold rights as security with those which are fully secured and holding prime property as collateral for the sole purpose of enhancing Uniwide's collateral position."

ABC also complained the amount due to the bank as stated in the amended rehab plan is not correct. Uniwide said it owes ABC a total of P358.258 million consisting of principal and interest. But ABC said the actual amount is P360.649 million.

ABC said Uniwide's rehab plan also ignores the rule that only expanded commercial banks may engage in non-allied undertakings.

"The plan which gives East West Bank a total f P7.936 million worth of condominium shares in the special purpose corporation to be created with Metromall as its solid asset, totally ignores the prohibition against banks which are not expanded commercial banks from owning equity in non-allied undertakings pursuant to the provisions of Section 21-A and 21-B of the General Banking Act."

ABC added that the plan also imposes impossible conditions precedent to the closing of the investment of Casino Guichard-Perrachon, a crucial component to the success of the amended rehabilitation plan.

"For instance, Casino Guichard-Perrachon vows not to infuse the much-needed P3.57 billion equity investment should it not find the terms of the so-called "condominiunization" of Metromall and Coastal Mall acceptable. But considering that it is not even a contracting party to the agreement between the secured creditors and Uniwide Sales Realty and Resources Corp., it is unreasonable to even require that the terms be acceptable to Casino Guuichard-Perrachon, as it contravenes the very essence of the freedom to contract where parties have the right to establish such stipulations, clauses, terms and conditions as they may deem convenient."

The French retail giant earlier signed a memorandum of understanding with Uniwide which specified it will pay P3.57 million in cash for 89.2 percent of Uniwide subsidiary, Uniwide Sales and Warehouse Club Inc. (USWCI).

Uniwide also sold another subsidiary, First Paragon Corporation (FPC) to IMart International for P145 million. FPC controls the Uniwide Family Stores, a chain of convenience stores.