Nenaco asks SEC to waive P75,000 fine

Citing its limited cashflow, Negros Navigation Co. (Nenaco), the inter-island shipping unit of Metro Pacific Corp., asked that the P75,000 penalty imposed on it by the Securities and Exchange Commission (SEC) be waived.

Nenaco was fined for its failure to comply with Sec. 17 of the Securities Regulation Code which requires all listed corporations to disclose any known trend, event or uncertainty that may have adversely affect their financial standing.

In a letter to the SEC, Nenaco president Conrado A. Carballo reiterated that it had nothing to report at the time it submitted its quarterly report for the third quarter of 2003. However, he said the company’s disclosure that it was negotiating for the restructuring of its debts was a clear indication of liquidity problems in the event that negotiations failed.

"We beg for your indulgence, considering that we are presently under rehabilitation and that our cashflow at the moment is very limited," Carballo said.

Carballo also noted that Nenaco disclosed in its third quarter report that it had a total obligation of P1.97 billion to banks and trade suppliers.

He said the event which had a material effect on Nenaco’s liquidity was the issuance on March 5, 2004 by the Cebu Regional Trial Court of a writ of preliminary attachment against the shipping firm’s properties which resulted in the grounding of one of its vessels.

"The grounding of M/S St. Peter the Apostle had a material effect on our liquidity because our cashflows depend on the operation of all our shipping vessels," Carballo said.

The writ of attachment was in response to the petition filed by one of Nenaco’s creditors, Japan’s Tsuneishi Heavy Industries Inc. to which the shipping firm owes over P100 million.

The company said it was close to signing a deal with prospective investors willing to infuse fresh capital when Tsuneishi started discrediting Nenaco.

Tsuneishi used to be a partner of Nenaco until it failed to pay for repairs on its vessels and for ship drydocking since 2002. It claimed that Nenaco failed to honor its promises to pay its debts despite the restructuring and rescheduling of the account.