In a disclosure to the Philippine Stock Exchange, Uniwide corporate information officer Jean Javier said the stores will cease operations effective June 30, 2003.
Javier said Uniwide is now finalizing the transfer of its Libis and Avenida properties under a dacion en pago arrangement with the Bank of the Philippine Islands.
The closure of these stores is part of efforts to save on operating costs and improve the company’s financial position.
Javier said the company’s nine remaining stores (Caloocan, Coastal Mall in Roxas Boulevard, Metromall in Las Pinas, Edsa Central, Sucat, Novaliches, Baclaran Pearl Plaza, Tarlac and Cabuyao, Laguna) will nevertheless continue to provide the "no-frills, best bargain" offers to its customers.
Javier said Uniwide will continue to focus on measures aimed at improving its retail operations to achieve its objective of settling all its obligations.
"With the continued support of its employees, suppliers and creditors, Uniwide firmly believes that it will be able to meet its commitments under the approved amended rehabilitation plan," Javier said.
The withdrawal in early 200l by French retail giant Casino-Guichard Perrachon of its plan to invest P3.57 billion in fresh capital into Uniwide prompted the filing by the discount retail chain of its amended rehabilitation plan.
Unlike the original rehabilitation plan, which is anchored on the entry of the Casino Group, the amended plan focuses on the dacion en pago (or payment-in-kind scheme) with the group’s secured creditors and the settlement of unsecured debts through the cash flow of Uniwide’s retail operations. The amended rehabilitation plan was approved by the Securities and Exchange Commission on Dec. 23, 2002.
Assets of the Uniwide group, as well as personal properties of the controlling Gow Family which are being held by creditors as security to their loan, will be used to settle the company’s outstanding debt.
These include three operating stores, two malls (Metromall and Coastal Mall), two future store sites in 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.
The total amount to be settled with secured creditors, net of debt already settled, is estimated at P6.61 billion, with Equitable PCI Bank having the biggest exposure of P1.74 billion.
Aside from Equitable-PCIBank and BPI, Uniwide’s other secured creditors include Philippine National Bank, Allied Banking Corp., ING Bank, Rizal Commercial Banking Corp., PCCI and Land Bank of the Philippines.
On the other hand, Uniwide proposes to settle its P2.54 billion in obligations to unsecured creditors – which include trade suppliers, contractors and private lenders – through the conversion of 50 percent of the unsecured debt into 15-year convertible notes that are redeemable anytime at the option of Uniwide.
The other half of the unsecured debt shall be restructured into a 10-year loan with zero interest, a grace period of three years and whose principal payment will start only on the fourth year. The restructured debt will be paid from the cash flow from the retail operations.
Uniwide is expected to be in the black this year as it remains focused on improving its margins and cutting costs to stay alive in the highly-competitive retail industry.
An industry source said the assumption was based on the significant improvement in Uniwide’s financial performance last year which saw the losses of the discount retail chain significantly declining to P30 million from P600 million in 2001.
Uniwide is currently focusing on its retailing operations to increase its daily-per-store sales to at least P3 millon.