Benpres losses widen to P450 million

Benpres Holdings Corp. widened its losses by nearly two and half times in the first nine months of 2002 as lower revenues from its subsidiaries coupled with the continued loss provisions from its investments significantly pulled down the holding company’s profitability.

Documents submitted to the Securities and Exchange Commission showed that for the nine-month period, the Lopez-controlled firm booked P450 million in losses as compared to the P182-million loss a year earlier.

Benpres said the losses took into account a 13.6-percent decrease in its revenues to P1.478 billion and a 142-percent surge in interest and other charges to P1.26 billion, mainly from the write-off of its investments in telecommunications unit Bayan Telecommunications Holdings Corp. (BayanTel).

Last year, the holding firm set aside a whopping P9.9 billion as provision for the decline of its investments in and advances to BayanTel – largely contributing to Benpres massive P10.25-billion loss in 2001 – as the telecoms firm and its subsidiaries (including mobile phone company Extelcom) remained saddled with debts and losses.

Benpres loss provision for BayanTel will be reviewed again by end of 2002 when it recognizes the remaining P5 billion guaranteed liability from the convertible preferred shares issued by BayanTel," the company said.

Credit Lyonnaise S.A., BayanTel’s financial advisor in its debt restructuring, has submitted its proposal to BayanTel creditors and discussions are still ongoing.

Benpres said that except for equity in net earnings of its investee companies, all components of revenue declined compared to last year, bringing down its revenue base for the nine-month period.

Although First Philippine Holdings Corp. (FPHC), the holding arm for investments in power and energy, among them Meralco, First Gas and First Generation Holdings, accounted for the bulk of equity earnings, its net income dropped 15 percent to P236.7 million.

While the flagship ABS-CBN Broadcasting Corp. continued to improve on its financial performance in the third quarter with a 34-percent increase in net income to P274 million from P204 millions in the second quarter, its net income for the nine-month period at P482 million was still 64 percent lower than the P1.3 billion posted in the prior year.

"The lower net income is a result of lower airtime revenues coupled with higher depreciation and interest expense," Benpres said.

ABS-CBN has finalized its Exchangeable Notes Facility Agreement (ENFA) last October, bringing its bank loans at end-September down 89 percent to P416 million, although its long-term debt increased to P5.8 billion from P2.4 billion.

Two of its creditor banks, BNP Paribas and Standard Chartered Bank, however, did not participate in the ENFA and have since demanded payment. While ABS-CBN’s outstanding loans with the two banks amount to $3.6 million and P100 million, respectively, constituting only one percent of its total assets, it continues to negotiate for possible refinancing of the loans from these two banks.

Sky Vision Corp., Central CATV Inc., and The Philippine Home Cable Holdings Inc. also continue to negotiate with their respective creditors concerning the restructuring of their debts.

Benpres is saddled with nearly $597 million (approximately P31 billion) in total debts, about a third or over $200 million of which are falling due this year. Under the Balance Sheet Management Plan, the company will seek the consent of its creditors for the restructuring of all liabilities, 86 percent of which are denominated, as the company explores various options to address its debt problems.