The amount represents Swift’s unpaid balance of P111.97 million as of end-October 2005 for the delivery by SMFI of assorted broiler feeds. The accumulated interest, amounted to P14.2 million.
Swift president Luis Bernardo Concepcion, said in a text message, that the company "recognizes its obligations to SMFI and will honor the same."
"We have made payments to them both in cash and through products we sold to them under offsetting arrangements which is proof of our sincerity and desire to settle our obligations," Concepcion said.
Concepcion said Swift has already "apologized and admitted to SMFI that we would not be able to pay outright the entire amount given the circumstances that have affected our business."
He expressed confidence that this matter would be resolved in an amicable manner. "We are optimistic that that this matter would be resolved in time and we hope SMFI will give us their understanding," Concepcion said.
Under the agreement, forged in September 2004, SMFI extended Swift a 30-day credit limit. Swift, in turn, agreed to cover for the cost of money at the rate of 1.5 percent for any unpaid amount in excess of its credit limit.
From September 2004 to February 2005, SMFI delivered P188 million worth of broiler feeds to Swift’s manufacturing plants in Bulacan, Isabela, Cagayan de Oro, Cebu, General Santos and Zamboanga.
Of this amount, only P69 million had been paid by the Concepcion-owned firm.
"By law and settled jurisprudence, (SMFI) is entitled to collect from Swift its outstanding obligations for its purchase from plaintiff of assorted broiler feeds," SMFI said in its complaint.
In the nine months ending September 2005, Swift suffered a net loss of P88 million compared with P1.5 billion the previous level. Revenues rose 14 percent to P2.21 billion from P2.57 billion, mainly due to lower consumer spending as a result of the continuous increase in oil prices.