Metrobank appeals court-approved changes in Philrealty rehab plan

Banking giant Metropolitan Bank & Trust Co. has appealed the decision of the Quezon City Regional Trial Court approving changes in the rehabilitation plan of the debt-strapped Philippine Realty & Holdings Corp.

In a motion before the Court of Appeals, Metrobank said the lower court’s decision was contrary to the facts, law and jurisprudence.

In approving the plan, the RTC noted that all creditor-banks were in agreement that Philrealty is susceptible to rehabilitation as it is solvent. The court also said there was no serious or significant objection to Philrealty’s proposal to settle debts through dacion en pago.

The RTC added that the amended rehabilitation plan "is a well-thought out study based on verifiable data and based as well on the results of the meetings with creditors."

Metrobank is of one Philrealty’s major creditors, which also include the Land Bank of the Philippines, Prudential Bank and the Export and Industry Bank.

The RTC earlier pointed out that while some creditor-banks do not totally and fully subscribe to the rehabilitation plan, the objections "do not appear to be of such a magnitude as would amount to a gross disadvantage to the reluctant creditor-banks."

The plan calls for the settlement of P1.31 billion in secured debts through dacion-en-pago, the restructuring of P890.6 million in debts over a 10-year period, and the completion of the Skyline Tower which is part of the company’s P1.18-billion Andrea North project in Quezon City.

At the end of two years from the initial implementation of the plan, the court will undertake a review of the entire rehabilitation plan to determine whether it should be continued or terminated.

Philrealty’s rehabilitation receiver considers the completion of the Andrea Skyline project critical to the firm’s rehabilitation efforts "as this would restore public confidence on the ability of petitioner to continue and complete its on-going projects and undertake new projects in line with its main purpose of real estate development."

The cashflows expected from joint ventures or the sale of Philrealty’s remaining assets will be used to complete the Andrea Skyline project.

Philrealty will retain P957.2 million worth of properties which could be used for operations, joint venture development and sale.

The company’s court-appointed receiver expects Philrealty to raise about P3.89 billion in cash over a 15-year period assuming that the company can limit total administrative expenses to a yearly increase of five percent per annum.

Philrealty, which was once part of the vaunted Bonifacio Land Corp. consortium, is primarily known for its projects in the Ortigas Center, foremost of which is the Tektite Towers – the headquarters of the Philippine Stock Exchange (PSE).

Its other projects and landbank include the Alexandra Condominiums in Ortigas and lot properties in Tagaytay, Batangas, Quezon and Rizal.