Presiding Judge Apolinario Bruselas Jr. of the Quezon City Regional Trial Court Branch 93 said in a Feb. 26 order that after a diligent review of the petition, along with comments from the company’s creditors and the Securities and Exchange Commission, "the court finds the petition to be impressed with merit."
Last December, the court approved the suspension of Philrealty’s debt payments upon the company’s request, putting the company under the supervision of a court-appointed receiver.
Philrealty president Amador Bacani said their petition for the debt payment moratorium is the main component of their corporate rehabilitation program, which will be overseen by Ricardo Ysmael, the designated rehabilitation receiver.
Among the creditor banks which gave their comments to Philrealty’s rehab plan are Metrobank, Export and Industry Bank and the LandBank of the Philippines.
Bruselas also directed the rehabilitation receiver to further study the plan and make his recommendation to the court concerning its feasibility.
"The court gives the rehabilitation receiver a period of about 45 days from today within which to peruse the rehabilitation plan, the comments thereto and to meet, if desirable, with the creditors for the purpose of being able to formulate his report on the matter," Bruselas said.
He added that another hearing is set on April 24 to monitor the developments in the case.
Bacani earlier 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 said the rehabilitation was called for since the company’s 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 2002, Philrealty’s losses remained heavy at 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 obligations 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.
Philrealty is primarily known for its projects in the Ortigas Center, foremost of which is the Tektite Towers – the headquarters of the Philippine Stock Exchange.