In a press briefing after the company’s annual stockholders’ meeting yesterday, BHC chief financial officer Angel Ong said that with nearly $597 million (approximately P31 billion) in total debts (about a third or over $200 million falling due this year), the holding company is hard pressed to explore a number of options to unburden itself from the debt load and restore its long-term financial health.
Raymond Davis, managing director of the New York based financial adviser Credit Suisse First Boston (CSFB), said under BHC’s balance sheet management plan, the company will seek the consent of its creditors for the restructuring of all liabilities 86 percent of which is dollar denominated, as soon as the plan is presented this month.
Specifically, the plan would require BHC to reduce debt, raise capital through asset divestment and bring down costs by freeing itself from further investments and capital calls on its infrastructure projects.
"The plan requires Benpres to reschedule liabilities to better match its dividend receipts from established companies such as ABS-CBN Broadcasting and First Philippine Holdings," Davis said.
Ong said another critical component of the plan is the aggressive selldown of its non-core assets which would include BHC’s stake in the non-listed firms First Philippine Infrastructure Development Corp., Beyond Cable Inc. and Rockwell Land.
As a holding company, BHC has interests in a wide range of industries, including its core communications and power generation units as well as utilities (Maynilad Water, Meralco), infrastructure, real estate, information technology and medical services.
Ong said that despite the slowdown in ABS-CBN’s income stream, BHC would stick it out with its 57-percent equity in the flagship broadcast firm. "At this time, there are no plans to sell ABS-CBN. Neither are there any discussions with anybody for that," he stressed.
Meanwhile, BHC EVP and chief strategist Christian Monsod said that aside from stakes in Rockwell, Beyond Cable and FPIDC, the asset divestment could also include part of its interest in First Generation Holdings Corp., the group’s vehicle for its power generation businesses.
Monsod said with about 13 percent sold down to two financial investors (AIDEC and Sumitomo) last year, "there is room for more if it becomes necessary or if it is at the right price."
First Gen, the country’s third largest independent power producer, posted strong revenue and income contribution of P14.4 billion and P3.14 billion, respectively, in 2001, boosted by the operations of its power plants in Sta. Rita and San Lorenzo in Batangas, Bauang, La Union and Panay.
Monsod added they are also working on similar selldowns in 59-percent subsidiary Maynilad Water and Manila North Tollways Corp., its joint venture with the Philippine National Construction Corp.
He said for its water distribution concession Maynilad, its financial adviser Credit Lyonnaise has been tapped to look for new investors/equity partners to infuse some $45 million into the company, on top of the $350-million term loan being negotiated to uplift Maynilad’s water system infrastructure and services.
He added BHC could also dispose of some 10 percent of its equity holding in MNTC to another strategic investor before the tollways project breaks ground this July after six years of preparation.
In the first quarter of 2002, BHC merely broke even with a meager P2-million net income, a huge 99-percent drop from a year earlier. For the past two years, BHC has been in the red, punctuated by the-huge P10.25-billion loss in 2001 due largely to the P9.9-billion write-down of its investments in BayanTel.