SEC set to proceed with Victorias Milling rehab

The Securities and Exchange Commission (SEC) will move ahead with the rehabilitation of sugar milling company Victorias Milling Co. Inc. (VMC) following the recent lapse of a temporary restraining order (TRO) issued by the Court of Appeals.

SEC Chairperson Lilia Bautista said she will ask the management committee (mancom) to submit a status report on the operations of the sugar firm and then implement the alternative rehabilitation plan (ARP) it has proposed way back in November last year.

The implementation of the ARP suffered a setback when then VMC chairman and president Manuel Mañalac petitioned the Court of Appeals to stop the SEC from implementing the ARP and instead undertake a counter proposal by the VMC management.

VMC had sought the SEC’s help in 1997 when it defaulted in the payment of its P3.4 billion during debts with 32 banks. In July of that same year, VMC secured a debt payment suspension from the SEC but was also ordered to constitute a mancom to oversee the company’s operation and rehabilitation.

The mancom, along with VMC management and its financial advisor Bankers Trust, then jointly developed a rehabilitation plan which has since undergone several changes.

The mancom’s ARP provides for the conversion of the company’s unsecured obligations amounting to P1.1 billion into equity equivalent to a 69-percent stake in VMC. Aside from this, the mancom asked for the conversion of some P2.4 billion in debt into convertible notes.

In addition, there must be a cash infusion of P300 million, either in the form of loans and advances from a joint venture partner. Should a willing investors come along, the clean/unsecured creditors shall be required to raise P300 million within 120 days from date of the debt-to-equity conversion and the appointment of a new board of directors. – Conrado Diaz Jr.