In an order, the Makati RTC has referred Primetown’s rehabilitation plan to Jose Absalom Jocom Jr., the firm’s duly appointed receiver, for study, evaluation and recommendation within 90 days from receipt of order.
"From the pleadings, comments of creditors and other documents thus far presented, the court finds the petition to be with merit. Petitioner presented sufficient basis for the petition to be given due course and for the rehabilitation plan to be evaluated by the receiver for appropriate favorable recommendation," the Makati RTC said.
In its petition filed with the court, Primetown said the potential value of its remaining assets can only be realized if it would be placed under rehabilitation and that liquidation of the company would now result in the recovery of 52 centavos for every peso of liability.
Primetown has interests in a 22.6-hectare property in Mactan, Cebu and 23 hectares of property in Boracay Island, which it is ready to cede to the creditors to liquidate the loan.
In addition, a group of investors has expressed willingness to arrange the settlement of Primetown’s P351.4 million loan to Philippine Bank of Communication, Government Service Insurance System, Asiatrust Banking Corp., Philippine National Bank, Bank Wise and Allied Banking Corp. The group is likewise willing to assign receivables from an agricultural project in Alabel, Sarangani Province.
Part of the rehabilitation plan is for the sale of the free and marketable inventory and receivable assets. Thereafter, new investors with new projects can come to contribute to the company.
At present, Primetown’s liabilities amount to P942.2 million while its assets amount to P695 million consisting of P408.2 million in real estate projects, P223.3 million in receivables, P42 million in investments, P19.7 million in other assets and P1.7 million in cash.
Primetown had pinned the blame on 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.
The condominium developer has been able to sustain its operations by collecting receivables relating to its completed projects and liquiditating some of its assets. The company was also able to finance its working capital requirements through collections of installment receivables on sales.
Primetown completed its first project in 1993 - the Century Citadel Inn Makati, the first condominium-hotel project in the country. It has since completed another condotel project (Makati Prime Century Tower) and launched several residential and commercial development projects within the Makati central business district, Fort Bonifacio, Cebu City, Tagaytay City and Boracay Island.