Court okays amended rehab plan for Ramcar

The Quezon City Regional Trial Court (RTC) approved recently the second amended rehabilitation plan of leading car battery manufacturer Ramcar, Inc. Since the petition for rehabilitation was submitted on Dec. 18, 2001, the rehab plan has undergone several changes and now incorporates the major concerns of its creditor banks and suppliers.

In a 75-page ruling issued by RTC Judge Reynaldo Daway, the court noted that creditor banks representing around 88 percent of the total obligations have agreed to a settlement under the terms of the rehab plan. Other banks representing the balance are now in the process of settling, also following the rehab plan terms.

The ruling states "… It bears stressing that, from the outset the undersigned directed the petitioners and the various creditors to come up, as much as practicable, with a rehabilitation plan that will be acceptable to all parties, and had directed the rehabilitation receiver to address the various concerns raised by the creditor-banks in the evaluation of the rehabilitation plan, all in the interest of fairness and transparency to all concerned. The court notes with gladness that, as a result of these efforts, the petitioners submitted as amended rehabilitation plan and later on, a second amended rehabilitation plan which was duly evaluated by the rehabilitation receiver."

The debt settlement plan in the second amended rehabilitation plan calls for the restructuring of the secured debt of the petitioners amounting to P1.468 billion, including unpaid interest; the full settlement of the unsecured debt of the petitioners amounting to P6.475 billion; and the immediate payment of the balance of the payables to the suppliers of the petitioners with the reinstatement of credit terms to levels not worse than what were in effect immediately preceding the Dec. 18, 2001 filing of the petition for rehabilitation.

Under the second amended rehabilitation plan also, the petitioners intend to pay their secured debt with the new money in the total amount of P872 million, which will come from their shareholders over a period of six years from the approval of the plan.

On the other hand, the petitioners intend to pay their unsecured debts via a dacion en pago of all the non-operating assets of the petitioners with the total value of P0.262 billion, representing 3.92 percent of the total unsecured debt to be settled, and of the assets to be contributed by the shareholders of the petitioners with the total value of P6.432 billion, representing 96.08 percent of the total unsecured debt to be settled.

The ruling on the second amended rehab plan – which took effect immediately – also noted favorably that at the end of the second quarter of 2003, the Ramcar group had substantially achieved its financial projections.

"Ramcar is now on the way to recovery. The reduction of debt to a manageable level will allow us to continue our modernization and expansion program. This will put the company back on a solid financial footing which will enable Ramcar to pursue its vision of becoming the most competitive battery manufacturer in Asia." according to Ramcar president Roberto V. Garcia.