Figaro needs P200 million to pay debts

MANILA, Philippines - The new management of Figaro Coffee Co. may have to shell out over P200 million to repay all debts of the local coffee company and keep it operating, Crismel Verano, acting chairman and chief executive officer, said yesterday.

In a press conference, Verano said his group has so far shelled out P50 million to keep the local coffee chain operating.

Verano said they are negotiating with their two creditor banks — Banco de Oro and Metrobank — for the restructuring of slightly over P100 million in outstanding debt incurred during the time of the old management of the chain.

Verano said the new management has written BDO and Metrobank to “hold in abeyance” any request or demand for payment of the outstanding loans.

The outstanding loan to BDO, Verano said, is around P93 million while the amount owed to Metrobank is a more manageable P5 million.

He said they have not yet committed to repay the outstanding debt as they are questioning how the debt was incurred and where the funds were actually used.

Verano said his group took over management of Figaro only last January. At the time of their takeover, Verano said, Figaro posted a negative balance sheet which he did not reveal, saying that the accounting of the coffee company’s finances is still being conducted.

According to Verano, Figaro can recover in one and a half year’s time. He said that at some future date, the new management team may convert its “out-of-pocket” expenses for Figaro to equity.

The Verano group has teamed up with the 56 percent majority owners of Figaro led by the Tanseco family in taking over control of management from the 43 percent plus held by the Francisco family and the family of former manager Pacita Juan.

Figaro was established in 1993.

Verano said Figaro would continue to expand and that his group is planning to expand to the Visayas and Mindanao. He added that they have no plans of reopening franchises abroad which were closed last year.