The new management of Pacific Plans Inc. (PPI), led by investment banker and Asian Spirit Airlines co-founder Noel Oñate, has unveiled a 10-point action plan aimed at steering the cash-strapped pre-need firm to a greener future amid a deepening global financial crisis.
In a dialogue with PPI investors late Tuesday afternoon, Oñate sought the cooperation and participation of planholders to enable the formerly Yuchengco-owned pre-need company to get back on its feet again.
“We are committed to having an open mind not only in this dialogue but in the way we manage the corporation. We can only ask the same from all our planholders. As we take a first step away from acrimony and hate, let us always remember that innovative solutions can only be developed when everyone has an open mind and an attentive ear, “ said Oñate.
Under a 10-point program aimed at restoring PPI’s soundness and viability, new management has committed to honor legal obligations for open-ended or traditional educational plans. Upon the maturity of the securities comprising the trust assets covering these plans presently valued at P2.3 billion next year, PPI, which will be renamed Abundance Providers Investment Corp. (APIC) shall pay off the traditional planholders their proportionate share in the trust assets in dollars which is projected to appreciate in the coming months.
In anticipation of an improving business climate, the new management will re-engineer its offerings , possibly with terms of three to five years that will allow for more effective liability-directed investment management of corporate assets.
“These new offerings will take into account all-weather hurdle rates with prices adjusted given current market conditions. At present, we have already discontinued the sale of products in our inventory that are priced using high hurdle rate assumptions of up to 18 percent and we will just continue servicing them,” Oñate said.
With the expected improvement of the economy, PPI will conduct an aggressive marketing campaign to sell new offerings and push its fixed-value educational,
pension and memorial plans. To support this move, the company will put up new branch offices in the Visayas and Mindanao.
PPI is currently studying ways to further streamline operations and generate savings on operational costs. It is also exploring cross-selling opportunities of other products to optimize the value of the firm’s 10,000-strong nationwide sales force.
The company has likewise committed to infuse professional management into PPI and put a cap on the salaries of corporate officers. It has committed not to distribute any dividends to its shareholders.
Aside from this, PPI’s new management is looking at transferring the trust funds to other trustee banks.
Oñate pointed out that the trust fund assets of PPI are sufficient to service obligations to planholders. “We will ensure that the trust funds with present consolidated value of P12.5 billion are prudently managed with focus on maximizing their proceeds,” he said.
Since acquiring PPI, Oñate’s group has been conducting a series of key meetings to implement a complete management transition.
“Our plan to turn around PPI is a work in progress. This is only the first in a series of dialogues we are having with our planholders. We want them to be our partner in finding ways to turn around this company” added APIC director Rita Linda Jimeno.