Based on a quarterly report filed with the Securities and Exchange Commission (SEC), Uniwide attributed the improvement in its financial performance to lower expenses.
Operating expenses fell 16.94 percent to P390.85 million from only P470.58 million. This represented a decrease in personal costs, utilities expense depreciation and representation expense. Net interest and other income likewise declined as mall tenants and lot buyers requested for waiver of interest and penalty charges for overdue accounts.
Consolidated revenues, on the other hand, slipped to P239.75 million due to the decrease in combined rental revenues as a result of the expiration of some rental contracts and concessions and discounts given to tenants.
Franchise fees, however, improved by almost 41 percent to P86.65 million as a result of the better sales performance of Uniwide’s franchisee, Uniwide Sales Warehouse Club Inc.
Uniwide said the cash proceeds from the sale of theme park rides owned by Naic Resources Development Corp., which was already part of the Dec. 31, 2001 cash balance, was used to retire existing obligations to a financial institution to which these rides are mortgaged.
As of end-September this year, Uniwide’s consolidated assets amounted to P12.1 billion as against P12.2 billion in Dec. 31, 2001. Total liabilities, on the other hand, reached P5.3 billion.
Uniwide’s second amended rehabilitation plan is still pending approval by the SEC. Based on the plan, the Uniwide Group has P6.48-billion outstanding debts with secured creditors excluding accrued interest and P2.54-billion rehabilitation accounts with unsecured creditors as of June 30, 1999.
In line with the plan, certain properties of the Uniwide Group with appraised values of P11.04 billion will be dacioned to secured creditor banks to extinguish the UHI Group and its affiliates’ debts amounting to P3.1 billion and P4.83 billion, respectively.
Liabilities to contractors who have liens and/or claims on Coastal Mall and the mall tenants who have deposit, advances and or claims on the Coastal Mall amounting to P57.66 million shall be paid with shares in the special purpose vehicle which will be formed in executing the dacion of the mall to all its creditors.
The debts with unsecured creditors will be settled partially through the issuance of the company’s convertible noted.
Among the properties to be dacioned are three operating stores (Cabuyao, Libis, and Avenida), two malls (Metromall and Coastal Mall) two future store sites Cubao and Iloilo, commercial and residential lots in Cavite and Laguna as well as commercial lots/properties in Caloocan City, Parañaque, Pasig, Quezon City, General Santos City, Bulacan, and Iloilo. These properties are valued at P12.97 billion.
Uniwide’s secured creditors include Philippine National Bank, Allied Banking Corp., EBC-PCIBank, ING Bank, Rizal Commercial Banking Corp., PCCI, Bank of the Philippine Islands, and Land Bank of the Philippines.
Gasping for its last breath of life, the Uniwide Group is asking the SEC to immediately approve its second amended rehabilitation plan despite the absence of a white knight because it believes the implementation of the same will result in the settlement of all its obligations to creditors.
Casino Guichard Perrachon, a leading retail chain in France, pulled out of its plan to invest in Uniwide as a result of the unfavorable political and economic conditions in the country which led to a change in government. It was supposed to acquire 89.2 percent of Uniwide for almost P4 billion.
Owned by businessman Jimmy Gow, the Uniwide Group sought reprieve from the SEC in June 1999 on the payment of its P11.1-billion debts owing to tight liquidity problems brought about by the financial crisis which erupted in July 1997 and the ensuing downturn in the economy.
To generate sufficient cash to fully pay its restructured unsecured debts and save jobs of 13,000 to 18,000 direct and indirect employees, Uniwide will return to its core business of retailing. Uniwide needs to increase its daily-per-store sales to at least P3 million which is targeted to be achieved by the second year of its rehabilitation.
With limited working capital, Uniwide will consolidate its operations to seven high revenue-generating stores and reduce the area of the Avenida Department Store. Savings in operating expenses net of one-time expenses for the closure of the stores will free some cash for inventory/sales.
Uniwide hopes to realize higher profits but will still maintain low prices to continue to cater to its captive market. The group continues to explore the possibilities of tying up with other interested investors.