SEC approves restructuring plan of Pepsi-Cola Products Phils

The Securities and Exchange Commission (SEC) has approved the capital restructuring plan of Pepsi-Cola Products Philippines Inc., the country’s second biggest soda company,

Under the plan, Pepsi will reduce its authorized capital stock to P750 million from P5 billion to have a reduction surplus of P2.82 billion. It will also reduce the par value of its shares from P1 to P0.15 per share.

This reduction surplus, Pepsi said, can be used to reduce the deficit of P4.24 million as of end-June last year.

Following the decrease, Pepsi will apply a portion of its additional paid-in capital to wipe out the remaining deficit of P1.43 million.

The SEC approved the plan on the condition that Pepsi disclose the same in its financial statements for a minimum period of three years.

In 2002, Pepsi reported a net income of P508 million as against a net loss of P38 million a year earlier.

The Presidential Commission on Good Government earlier announced plans to take control of Pepsi assets allegedly brought with coconut levy funds in the 1980s.

The PCGG wants to forfeit the assets of three companies: ECI Challenge Corp., Pepsi Cola Bottling Corp. (PCBG), and Pepsi Cola Distributors (PCD), estimated to be worth billions of pesos, at the time of their purchase in 1985.

In a 21-page motion, PCGG asked the Sandiganbayan to resolve the ownership of the three companies, and pressed the anti-graft court to award the companies to the National Government, which would then hold their assets in trust for coconut farmers.

Based on court records, ECI incorpored Pepsi-Cola Bottling Group of the Philippines Inc. as a wholly-owned subsidiary, to acquire and operate the local bottling assets of PepsiCo. In turn, this company incorporated Pepsi-Cola Distributors as a wholly-owned subsidiary to distribute Pepsi products for the mother company.

The Lorenzos bought all the bottling assets and the Pepsi-Cola franchise in 1989. But the plant was later on sold to Prime Orion Properties Inc. in 1997.