Primetown mulls suspension of loan payments

Burdened by huge debts, property firm Primetown Property Group Inc. is considering a suspension of loan payments to keep its creditors at bay as it works out a viable rehabilitation plan.

In a disclosure to the Philippine Stock Exchange, Primetown said its shareholders approved a resolution authorizing the board to file a petition before the courts to place the corporation under rehabilitation. No other details were given by the company.

As a result, the PSE suspended indefinitely the trading of Primetown shares last Monday. Citing the exchange’s listing rules, the PSE said Primetown’s plan to file rehabilitation proceedings would warrant an immediate suspension of trading of its shares to ensure the protection of the investing public.

Last year, Primetown incurred a net loss of P335 million due to the write-off of non-operating assets and liabilities valued at P274 million. It blamed the deterioration of its operations to steep interests on unpaid loans and provision for inventory valuation relating to suspended projects amounting to P76 million.

The company’s hotel operations recorded a P7 million loss in 2002 due to the slump in the tourism industry. It owns Century Citadel Inn and Makati Prime Century Tower in Makati City; two condotel projects in Cebu City; the Gold Coast Towers in Mactan Cebu; the Diamond Head International Resort in Boracay; and the Conservation in Fort Bonifacio.

Primetown has been on the lookout for prospective strategic investors to help it redevelop its idle real estate properties to settle its debt.

The company’s rehabilitation plan involves inviting principal shareholders and prospective strategic investors to participate in the retirement and/or settlement of the company’s obligations to banks and buyers in uncompleted projects. This will allow the company to start new projects and new businesses on a clean slate.

Primetown said it has sufficient assets to cover its debts. Apart from the condotels, the company owns a 1.7-hectare mixed-used residential and commercial development project in San Antonio Village in Makati consisting of low-rise townhouses, three high-rise condominium towers and a commercial center.

Primetown was incorporated in 1989 as an entity engaged in real estate development. Owned by the Yap family, Primetown pioneered the "condotel" concept (condominium-hotel) in the country, expanding into other variants such as the "meditel" (medical-hotel) and resortel" (resort condominium-hotel).

The company’s Meditel project, for instance, is a pioneering endeavor which features facilities for expanded out-patient service, state of the art diagnostic center, dedicated clinics and doctors’ offices.