SEC gives ASB Group more time to pursue rehab program

The Securities and Exchange Commission (SEC) has given the ASB Group of Companies more breathing space to pursue its rehabilitation program.

In an order released last week, the SEC hearing panel denied the petition of several ASB individual creditors to claim the P200-million proceeds of the sale of Development Bank of Singapore shares last June.

At the same time, the SEC approved, on the other hand, an agreement between ASB and International Exchange Bank (iBank) wherein an estimated P494.693 million of ASB’s total obligations would be settled through the transfer of the Garden Heights project into a new company (NewCo).

On the part of the individual creditors led by Jerome Paras, Cheng Lay Jr., Leonardo Siguion Reyna, Judy Chua, Larry Go, Elias Cosme, Deogracias Eufemio, Rodolfo Tuason, Tee Ling Kiat, Manny Dayrit and Marcelo Rodil, they have asked the SEC that instead of delivering the proceeds of the sale of DBS shares to ASB’s rehabilitation receiver to form part of the asset pool, the amount should be made available for payment to the unsecured creditors.

"It should be remembered that the asset pool is a crucial component of the rehabilitation plan, meant not only to settle the obligations of petitioners (ASB) to unsecured creditors but also to rehabilitate and restore the operation of the ASB Group of Companies," the SEC said.

The agency added the asset pool is envisioned to generate and build up funds to complete unfinished developments, start new projects and eventually enable ASB to settle all their obligations, particularly to the unsecured creditors.

"Moreover, even if the entire proceeds from the sale of the DBS shares are made available to the unsecured creditors, the P200-million payment resulting therefrom is a mere drop in the bucket," the SEC said, noting that ASB has an aggregate liability of P4.337 billion to the unsecured creditors consisting of 700 individual creditors-depositors, contractors and suppliers.

The DBS shares, owned by ASB and its controlling stockholder Luke Roxas, were sold for a total consideration of P734.216 million, netting P200 million in the process which will then go to an asset pool that will be tapped to resume the construction of the BSA Twin Tower.

On ASB’s agreement with iBank, the SEC said after thorough evaluation, it found out that the scheme would work to the benefit of the creditors, the condominium unit buyers/holders and ASB itself.

Under the agreement, ASB Land will create a wholly-owned special purpose company (NewCo) to which it will assign all its rights and interests over the Garden Heights project, including certain assets and liabilities.

ASB Land will also assume all the outstanding obligations of sister companies ASB Realty, ASB Development Corp. and portions of the outstanding obligations of ASB Finance to iBank, totaling P103.81 million. The remaining obligations of ASB Finance shall be assumed by NewCo.

Thereafter, ASB Land and iBank shall implement a dacion en pago whereby ASB Land shall assign all its shareholdings in NewCo to iBank, in payment of its liabilities assumed from the other companies.