The Lopez-owned holding company, the parent firm of ABS-CBN Broadcasting Corp., First Philippine Holdings, Meralco and BayanTel, among others, said it defaulted on the interest payment for its LTCPs yesterday, the fourth time it did so this year.
Since it announced a Balance Sheet Management Plan to address its heavy debt exposure, BHC has failed to make interest payments for the LTCPs last June 17, July 1 and Sept. 17.
BHC issued P3-billion worth of LTCPs in August 1996 to finance its investments in real property development, telecommunications, infrastructure projects and power-related projects of its subsidiaries and affiliates.
The LTCPs were offered and issued in two series the first tranche of P1 billion of which was fully paid last year. Under the terms, the next P2 billion will be repaid in one lump sum on Oct. 1, 2003 with interest at 1-1/8 percent above the 91-day Treasury bill rate.
In addition, BHC also defaulted on its 7.875 percent Euronotes due last Jun 19. The company issued the equivalent of P7.754-billion worth of five-year Euronotes, issued in 1997 and listed at the Luxembourg Stock Exchange.
BHC is saddled with nearly $597 million (approximately P31 billion) in total debts, about a third or over $200 million of which is falling due this year.
Under its 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 the company explores various options to address its debt problems.
These options include the divestment of its non-core assets and a freeze on new investments and capital calls on its infrastructure projects. – Conrado Diaz Jr.