Lawyer Jose Absalom L. Jocom Jr. will replace Ariel Salvador Magno who earlier declined the appointment as Primetown’s receiver.
Primetown has secured a reprieve from the Makati RTC on the payment of its debts to creditors, preventing the company from paying its outstanding liabilities as of July 2, 2003.
The stay order, however, does not cover payments and transactions done in the normal course of business such as settlement of administrative expenses, including salaries and payments for goods and supplies.
A hearing has been set on Sept. 24 to discuss the proposed rehabilitation plan of Primetown.
Primetown had blamed the Asian financial crisis, which resulted in high interest rates, the significant devaluation of the Philippine currency, and increasing cost of development and construction for its financial woes.
In documents submitted to the Securities and Exchange Commission, Primetown said it would focus on a recapitalization program to build up its capital base and improve its liquidity.
The program involves inviting principal shareholders and prospective strategic investors to participate in the retirement and/or settlement of the company’s obligations to the banks and the buyers in uncompleted projects.
This, in effect, will allow Primetown to start new projects and new businesses on a clean slate.
Primetown had earlier forged an agreement with a third-party developer for the construction of The Meditel project, a condominium building in Mandaluyong City. Under the agreement, the building will be established in a joint venture with the land owner and the Meditel buyers.
A similar program is being planned for the company’s Goldcoast project in Mactan, Cebu which should take care of up to P300 million of paid-in amounts owed to buyers.
To cut further losses, the company also plans to spin off its hotel operations and turn over management of rental pool units to the association of unit-owners. The hotels’ operations have been incurring deficits for the last three years.
For the first quarter this year, Primetown’s losses decreased to P2.08 million from P3.1 million the same period a year ago. The loss, however, contributed to the ballooning capital deficiency which has accumulated to P448 million from last year’s P446 million.
The company also attributed its losses to the lack of revenues to cover operating expenses as a result of the continued suspension of its projects since 1998.
Primetown’s list of projects include the Century Citadel Inn Makati, the first condominium-hotel project in the country; another condotel in Makati Prime Century Tower; and several residential and commercial development projects within the Makati Central Business District, Fort Bonifacio, Cebu City, Tagaytay City and Boracay Island.