RJ Group bares P1-B settlement with PNB

Ramon "RJ" Jacinto, chairman of the RJ Group of Companies, announced yesterday a P1-billion settlement with the Philippine National Bank (PNB) covering the debts of five of its member companies namely: Rajah Broadcasting Network (RBN), RJ Ventures Realty (RVR), First Women’s Credit Corp. (FWCC), Duty Paid Imports Inc., and RJ Music City.

"Though by our reckoning, the RJ Group owned only P350 million because the bulk of the loans went back to PNB as payment for the Buendia Land Property, we agreed to absorb the FWCC debt of P187 million and arrive at a P1-billion compromise so we can put this behind us and start again with PNB on a "clean books" basis," Jacinto said in a press statement.

"There was a lot of controversial publicity generated by the previous Estrada government insinuating that the purchase of the PNB Buendia land was a behest loan when the truth was we bought the property for a very high price and PNB showed a P3.7-billion profit because of our purchase. President Ramos had nothing to do with it," Jacinto said further.

"The pronouncements of the previous administration plus the collapse in the property market made it impossible to develop the property and had a domino effect on the cash flow of my other companies," Jacinto said.

Under the agreement, which still have to be ratified by the PNB board, the Buendia land property will revert back to PNB and the RJ Group will withdraw all legal suits and encumbrances. Aside from losing the downpayment and interest payment on the land of $40 million, the RJ Group agreed to pay another P1 billion. PNB, in turn agreed to waive penalties and interest and consolidated the debts of the companies under Rajah Broadcasting Network.

RBN assets have appreciated due to the boom in wireless broadband and broadcast values.

RBN has valuable frequencies and part of the P1 billion will also be paid by rendering telecoms and data transmission services to PNB and subsidiary companies of the Lucio Tan group using the LMDS technology (Local Multipoint Distribution System).

RBN was the first to apply for wireless broadband. Another company, Broadband Phils., has launched actual operations of LMDS in the Philippines but Rajah Broadcasting has the most desirable frequencies for the LMDS technology.