In a special meeting last Wednesday, the board of directors unanimously approved a resolution earlier presented to stockholders authorizing the board, particularly its president Amador Bacani, to "exercise full power and authority to take or cause such action... to rehabilitate the corporation."
Bacani said the company plans to explore various alternatives on how to go about its rehabilitation, including the settlement of its obligations to creditors by way of dacion en pago (debt-to-asset swap) of its real properties; the sale or transfer of its assets; conversion of obligations into equity (debt-to-equity swap); modification of shareholders’ rights; issuance of bonded indebtedness; and the restructuring of its obligations.
He added that a resolution has also been approved granting him full authority in filing a petition for rehabilitation and suspension of payments before the courts or the corporate regulator, realizing that its cash flow has been insufficient to fully service its total P3.76-billion liabilities as well as finance its working capital needs.
For the first nine months of this year, Philrealty incurred a loss of P168 million, although this was substantially lower than the P633 million net loss in the same period last year.
Since 1998, the company has been offering land properties to the banks as payment for its obligation through dacion en pago arrangements.
It has also temporarily suspended the development and completion of real estate projects such as the Manila Golf Crest in Fort Bonifacio, Ivy League Square in Malate and Urdaneta Country Plaza in Pangasinan, and implemented cost-cutting measures, including the reduction of its workforce.
Once a high-profile real estate company, the publicly-listed Philrealty is primarily known for its projects in the Ortigas Center, foremost of which is the Textite Towers – the headquarters of the Philippine Stock Exchange.
Its other projects and landbank include the Alexandra Condominiums in Ortigas, the Andrea North mixed-use complex in Quezon City, and lot properties in Tagaytay, Batangas, Quezon and Rizal.