Global Equities eyes debt-asset swap

Listed manufacturing firm Global Equities Inc. (GEI) is negotiating with its creditor-banks for the restructuring of loans through debt-asset swap to reduce liabilities to a more manageable level and stay afloat.

Controlled by businesswoman Nora Bitong, GEI is into real estate development and the manufacture of personal, health and baby care products.

In documents filed with the Securities and Exchange Commission, GEI said it is "still in the process of restructuring its loan obligations from various banks through dacion en pago or joint venture arrangements."

Among its creditor-banks are Equitable PCIBank (P285.31 million) and United Overseas Bank (P231.5 million).

The loans of GEI are collateralized by mortgage over investments in real estate and shares of stock and machinery and equipment. These loans are also covered by the continuing guarantee of GEI’s principal stockholder.

GEI expressed confidence that it will be able to liquidate its debts by at least 40 to 70 percent by the end of the year which would reduce financial charges that have weighed down on its bottomline. "The target though remains full liquidation of its bank loans this calendar year 2002," the company said.

The company is looking at retiring its bank debts through the sale of real estate investments.

GEI had earlier planned to venture into information technology and realign its assets and liabilities to a new wholly owned holding entity. However, the plan to convert into an IT firm was shelved after GEI aborted a share-swap deal with Systems Technology Institute and Systems Standard, Inc. due to the continuing slowdown in the IT industry.

Based on the original plan, the transfer would have involved the activation of Global Airport Container Yard (GACY), a nonoperating 100 percent subsidiary as the corporate vehicle to receive the net assets of the company. The corporate name of GACY will eventually be amended to GEI Assets Corp. and its primary purpose changed from warehousing, packing and crating of goods to a holding company.

Among its other subsidiaries are Global Airport Business Park, Global Airport Facilities, Global Airport Storage Co. and Global Business Park Ventures – all based in Parañaque; manufacturing firm Adamson & Adamson; and property firms Mt. Ridge and Clark’s Sacobia Hills and Country Club Inc.

GEI is developing the 10-hectare business park along Ninoy Aquino Ave. in Parañaque at a cost of between P500 million to P1 billion to support and cater to businesses within the main airport hub.