Avenue Asia buys Benpres’ debts

Avenue Asia Capital Group, the partner of Union Bank which lost to taipan Lucio Tan in a bid for a 67-percent stake in Philippine National Bank (PNB), has bought the debts of Lopez-controlled Benpres Holdings Corp., The STAR sources disclosed.

Avenue Asia is also a major holder of Bayantel’s $200 million in bonds. It is an international fund that acquires distressed banking assets which earlier bought P2.4 billion of the non-performing loans of the Bank of Philippine Islands (BPI).

It is not immediately known how much of Benpres’ debts was acquired by Avenue, but a highly placed source from the Benpres group has confirmed that Avenue has indeed bought the debts of the Lopez holding firm.

Benpres has around $548 million in debts. The amount is expected to be reduced to around $400 million following the return of unit Maynilad Water Services’ water concession to the government which will remove its guarantee on $145 million in debts of Maynilad.

Boosted by gains from the sale of its investment in a listed telecommunications company, Benpres posted a net income of P297 million in the first half of the year, a reversal from the P191-million loss incurred in the same period last year.

Company president and CEO Angel Ong earlier said that Benpres expects to book a net income of at least a billion pesos this year by reversing provisions for probable losses made in previous years for its investment in Maynilad Water Services. These provisions total P1.4 billion.

Benpres, the holding firm of the Lopez group, earlier reported a net loss of P1.36 billion in 2004.

It expects the return to profitability and a cut in its outstanding debt to $403 million this year, from $546 million, after writing off its investment in Maynilad. The latter has around P10 billion in total debts that are guaranteed by Benpres.

Benpres has also said that it will also sell some of its prime assets to help ensure cash flow and cut down its debt. These will include its interests in Manila North Tollways Corp. (MNTC) that operates the 84-kilometer North Luzon Expressway, in Medical City, and Bayan Telecommunications (BayanTel).

Benpres owns one-third of MNTC, 19 to 20 percent of Medical City, and 85 percent of BayanTel.