Benpres calls special meet on debt restructuring program

Benpres Holdings Corp., the debt-saddled holding company of the Lopez Group of Companies, has called for a special stockholders meeting on March 13, to seek stockholders’ consent for its debt restructuring program.

The company informed the Philippine Stock Exchange (PSE) yesterday that management would recommend to the stockholders "the delegation to the Board of directors the authority to take all actions and matters necessary and desirable for the restructuring of the corporation’s obligations under its Balance Sheet Management Plan."

Benpres is saddled with nearly $597 million (about P32 billion) in total debts, about a third or over $200 million of which fell due last year, leading to a string of defaults on their payments.

Under the BSMP approved by its stockholders last year, the company will seek the consent of its creditors for the restructuring of all liabilities, 86 percent of which are dollar-denominated, while it continues to explore various options to address its debt problems.

These options include, among others, the divestment of its non-core assets and a freeze on new investments and capital calls on its infrastructure projects.

The special stockholders meeting on March 13 will pave the way for the grant of the stockholders full authority to the board of directors to negotiate and strike deals with their creditors without the need for prior stockholders’ approval, hence fasttracking and debt negotiation process.

While still seeking its creditors’ consent for the BSMP, Benpres started last December the interim semi-annual payments of $6.9 million for its various peso and dollar-denominated loans.

"Although Benpres has not reached an agreement with its creditors on the BSMP, it is commencing interim payments as earlier announced. These interim payments are being made as a good faith gesture by Benpres," corporate secretary Enrique Quiason earlier told the PSE.

He said under the BSMP, Benpres has proposed to make payments every six months at a rate of one percent above the 182-day Treasury bill rate for the peso-denominated obligations and one percent above Libor (London Interbank Offer Rate) for the dollar loans.

Last Nov. 30, Benpres, in fact, commenced making the $6.9 million interim payments for the June 1 to Nov. 30, 2002 period. The payment covered the P2 billion in long-term commercial papers (LTCPs); the $150 million Eurobonds; the $130 million BayanTel convertible preferred shares; and the BayanTel put options valued at no more than $50 million.