DBP opposes All Asia Capital rehab plan

The Development Bank of the Philippines is opposing the rehabilitation plan of All AsiaCapital and Trust Corp. (AACTC) as it is considering going after its over P1.1-billion loan exposure to the troubled financial service company.

In a letter to the Securities and Exchange Commission (SEC), DBP assistant legal counsel Mariano Guerrero said the bank needs information on the status of AACTC’s compliance with certain conditions set by the SEC’s Market Regulation Department for the renewal of the company’s license as an investment house and the permanent lifting of the cease and desist order issued on July 21, 2000.

The state financing institution, one of the major creditors of AACTC, is set to file its opposition to AACTC’s rehabilitation plan before the Regional Trial Court of Makati on or before Oct. 31, 2001.

Once one of the country’s leading financial service institutions, AACTC was plunged into dire financial straits last year when it was besieged by the heavy pre-termination of placements and investments of its clients, following the collapse of several other investments companies notably Westmont Investments Corp., East Asia Capital Investments Corp., and Corporate Investments Philippines, Inc.

Although AACTC boasts of an asset base of over P6 billion, most of these are reportedly lodged in real estate and long-term commercial papers which could not be readily converted into cash to supplement its estimated P1-billion short-term liquidity needs.

Aside from issuing the CDO, the SEC also did not renew the trust license of AACTC which expired last July. Last month, AACTC sought for debt relief as it filed for a debt payment moratorium along with a rehabilitation proposal before the Makati RTC.

The debts primarily involve a $17-million loan facility extended by the World Bank’s investment arm, International Finance Corp. (IFC), which is also a minority shareholder in AACTC with a seven percent stake.