Nenaco owners vow to put firm on track

The owners of debt-plagued Negros Navigation Co. (Nenaco) are undertaking drastic changes in the company, including a revamp in top management, in order to put the shipping firm back on track.

In an interview, First Pacific Co. managing director Manuel Pangilinan admitted that they have not given Nenaco the kind of attention and changes compared to other companies owned by the Hong Kong-based conglomerate and Metro Pacific Corp. (MPC).

First Pacific Corp. (FPC) owns Metro Pacific which in turn has controlling interest in Nenaco. EPC has admittedly focused its investments in the Philippines mainly on Philippine Long Distance Telephone Co. (PLDT) in which it has a 24.4 percent controlling interest and in Indonesia-based Indofood Corp.

On the one hand, Metro Pacific has been focusing its attention on its more profitable ventures like its property in Fort Bonifacio and its high-end property development arm Landco Pacific.

Aside from management changes, MPC is also looking at "repositioning" Nenaco, possibly by spinning it off into a separate entity to shield the parent from the financial problems of the subsidiary.

Nenaco earlier sought court protection in order to stave off attempts by its creditors to foreclose the assets to satisfy the company’s liabilities, as an initial step in the implementation of a rehabilitation program. The court stopped Nenaco from paying off its loans totaling P2.5 billion and the creditors from collecting in the meantime. Bulk of the debts is owed to the Development Bank of the Philippines.

The court petition for corporate rehabilitation, however, was primarily aimed at preventing Cebu-based Tsuneishi from going after Nenaco’s ships to satisfy the latter’s liabilities in terms of unpaid ship repair and maintenance charges.

Pangilinan said that compared to other companies of First Pacific and MPC, Nenaco has been behind in terms of rehabilitation effort.

"Internally, we have treated Nenaco as stepchild, as a problem child. We know that we are partly to blame for its problems, not having given it enough attention, but we want to make amends and devote more time to it," Pangilinan, who sits as director of MPC, said.

First Pacific’s chief executive pointed out that they have no plans of infusing additional money into Nenaco, but will instead stick to the rehabilitation plan submitted to court for approval.

Nenaco used to be owned by the Lacsons of Bacolod until it was bought by Metro Pacific.

Nenaco earlier fired its chief executive Seumas Gallagher who was blamed for the mess the company was in and appointed Conrado Carballo in his stead. Some sectors, however, say that the problem stemmed from the fact that MPC retained most of Nenaco’s old management and therefore retained the old problems of the company.

However, Carballo, who was been in the company even before Nenaco was acquired by MPC, is also under fire from the employees who allegedly are questioning his frivolous lifestyle and his frequent absence from the company.

Nenaco has an accumulated net loss of P3.25 billion from 1999 to 2003 because of foreign exchange adjustment on loans.

In its petition before the Manila Regional Trial Court, Nenaco is proposing to restructure its loans for a period of 10 years, inclusive of a one-year grace period on interest payments and three-year grace on principal.