The debt-saddled ASB Group of Companies is asking the Securities and Exchange Commission (SEC) for a 60-day reprieve on its debts and the appointment of an interim receiver to implement its proposed rehabilitation program.
ASB is the owner and developer of a number of real estate projects, mostly condominium projects of which 19 are completed and four, particularly the BSA Twin Tower, Garden Heights, the ASB Malayan Tower and Legaspi Place, are currently under various stages of construction.
In its petition for receivership and suspension of debt payments, the ASB Group said its total assets of P19.410 billion will more than cover its liabilities amounting to P12.7 billion and despite its problems, its operations are still viable.
Most of ASB's projects were financed with loans or borrowing from bank and individual creditors. Things turned sour, however, when there was a sudden non-renewal and massive withdrawal by creditors of their loans to ASB Holdings Inc. This was compounded by the glut in the real estate market, the severe drop in the sale of real properties, the depreciation of the peso vis-a-vis the dollar, and decreased investor confidence in the economy.
As a result, ASB was unable to complete and sell some of its projects on schedule, and failed to service its debts as they matured.
ASB said the suspension of debt payments is needed for the company to keep its creditors at bay, especially those who are planning to institute extrajudicial and judicial foreclosure proceedings. Without a court order, the company said its operations will be paralyzed and its assets dissipated or wasted.
ASB has at least 712 creditors, 317 contractors/suppliers and 492 condominium unit buyers who will be prejudiced by the disruption of the operations of the ASB Group.
"The business of petitioner ASB Group of Companies is feasible and profitable...it will eventually be able to pay all of its obligations given some changes in its management, organization, policies, strategies, operations of finances."
The ASB Group has proposed a rehabilitation plan with the following salient features: servicing and eventual full repayment of all debts and liabilities, focusing assignment, or outright sale of assets, in order to lighten its debt burden.
The rehabilitation plan proposes strategies alliances with third party investors, including joint ventures and similar arrangements; contributing specified properties from ASB allied companies, streamlining of the operations of ASB Group, and the effective management of its financial and business positions;
The plan seeks to stabilize the operations of ASB Group and to prepare it to take advantage of future opportunities for grown and development.
The ASB Group said it has been acting in good faith even when its financial problems unraveled last March. It agreed to the creation of a creditors' committee composed of individual creditors and to the appointment of a comptroller.
Unfortunately, the comptroller unreasonably withheld the approval of payment of obligations unless its owner agreed to the payment of interest and some other arrangements, which the company said would eventually harm the creditors.
The ASB Group wants the SEC to appoint as members of the receiver, Monico V. Jacob, former SEC commissioner and ex-chairman of Petron Corp., Arthur N. Aguilar, former president of the National Development Co., and Carlos Alindada formerly of the SGV Group of Companies.