SEC pushes for Uniwide's amended rehab plan

The Securities and Exchange Commission (SEC) is persuading all creditors of Uniwide Group of Companies to drop their opposition to the company's amended rehabilitation plan.

SEC Chairman Lilia Bautista said the regulator, other government finance agencies and the receiver of the retail and property concern are trying to convince some of Uniwide's opposing creditor banks to "let go" of their reservations and allow the retailer to implement its rehab plan.

Bautista said the creditor-banks' approval of the plan is critical for Uniwide's foreign investor, Casino Guichard-Perrachon, to push through with its entry and takeover of the company.

"This is a P3.57-billion investment which our country needs especially at these critical times," Bautista said.

The French retail giant is paying P3.57 billion in cash for 89.2 percent of Uniwide. Its entry along with the fresh infusion and the dacion en pago arrangements with the creditor banks, will allow Uniwide to settle a substantial portion of its obligations.

The Casino Group and UHI signed a memorandum of understanding for the sale of the warehouse clubs which will be finalized by June this year.

Some banks are wary of giving their approval to the plan. Despite this, the SEC in recent months, approved the amended rehab plan of Uniwide.

The SEC said it saw the potential of a turnaround and saving the holding firm, the Uniwide Holdings Inc. (UHI), will prevent further deterioration in the sagging confidence in the securities market.

The SEC said Uniwide has more to lose if its proposed recovery scheme is not approved. One, it will lose French retail investor Casino Guichard-Perrachon. Moreover, the liquidation of Uniwide will have the unsecured creditors, about 1,200, unable to recover any centavo on their claims, while some of the creditors will be getting more than the amounts they loaned out to the company because they are over-collateralized.

Worse, UHI, a listed firm, will become bankrupt, resulting in the loss of the investment of hundreds of small investors.

The SEC also noted that the number of creditors who approved of the recovery package of Uniwide, is greater than those who continue to oppose the plan. --