Steniel shareholders approve rehab plan

Shareholders of publicly-listed Steniel Manufacturing Corp. have given their approval on the debt-strapped packaging firm’s plan to go into rehabilitation.

In a disclosure to the Philippine Stock Exchange, Steniel said "shareholders, representing at least two thirds of the company’s issued and outstanding capital stock, authorized the company to enter into rehabilitation proceedings."

Steniel owes banks about P700 million in loans. With interest, the company’s debt reaches up to P850 million.

Steniel said its board also agreed to move the annual stockholders’ meeting to September due to the ongoing restructuring plans and to allow the completion of the transfer of shares in Steniel (Netherlands) Holdings B.V.

Among the listed packaging firm’s creditors include Metropolitan Bank & Trust Co., which accounts for 53 percent of Steniel’s debt, Bank of the Philippine Islands and Chinatrust (Phils.) Commercial Bank Corp.

Based on its rehabilitation plan, the company is considering several modes such as discount in loans, dacion en pago, and conversion from debt to equity or extension of the repayment period of debt. Steniel hopes to restructure its debts over a one-year period.

The banks issued a notice of default to Steniel but foreclosure of the packaging firm’s assets will be the last option.

In the first quarter this year, Steniel reduced its losses to P31.02 million from P40.27 million the previous year-period on lower operating expenses.

Gross profit likewise grew to P13.6 million from P5.1 million as a result of increased tolling volume and improved average selling prices.

Steniel manufactures carton packages for agricultural companies. Its plant in Cebu has capacity to produce 1,000 tons of carton a month while its Davao plant can churn in 3,500 tons of carton a month.

The firm’s plant in Cavite, on the other hand, has been suspended but can produce 3,000 tons a month. As of end-2005, Steniel had around 480 employees.