Benpres remains in talks with creditors even as debt level drops

MANILA, Philippines - Benpres Holdings Corp. continues to be in discussions with its creditor-banks even as its debt has been reduced to a manageable level.

“We’re in a comfortable situation now after we have brought down our debt to a more manageable level. We continue to hold negotiations with other creditors though,” said Angel Ong, Benpress president and chief operating officer, on the sidelines of First Gen’s annual shareholders’ meeting yesterday.

Ong said the company has successfully trimmed its debt to around P3 billion.

Last year, Benpres achieved a breakthrough in its seven-year debt restructuring exercise by buying an aggregate of $287 million in debt from certain creditors.

Last week, the company’s board approved the change in its corporate name to Lopez Holdings Corp., which shall be subject to the approval of the holding firm’s shareholders in its annual meeting scheduled on June 10.

Benpres is the parent company of multi-media conglomerate ABS-CBN Broadcasting Corp., and First Philippine Holdings Corp. a holding company with investments in power generation, power distribution, manufacturing and property.

Net earnings of Benpres grew more than four-fold last year to P11.9 billion from P2.9 billion in 2008. Revenues rose 11 percent to P24.85 billion from P22.31 billion.

The increase is attributable to the recorded P7.5-billion net gain from buying back an aggregate of $287 million in debt from certain creditors of Benpres during the period under review.

Also contributing to the higher net income was the company’s share in earnings of FPHC which substantially increased because of the sale of its 20 percent ownership in utility giant Manila Electric Co. (Meralco).

Equity in net earnings of associates rose six-fold to P4.2 billion year-on-year as FPHC reported a P9-billion gain on the sale of a portion of its shares in the country’s largest power distributor.

FPHC sold 223 million Meralco shares in 2009 for P20.07 billion. It sold an additional 74.7 million Meralco shares, or 6.6 percent of Meralco, in March 2010 for P22.41 billion.

Benpres likewise received a total of P823 million dividends in 2009 from investees ABS-CBN Broadcasting Corp., FPHC and Rockwell Land Corp. In August 2009, Benpres sold its stake in Rockwell Land and shares of Digitel, which were part of its portfolio in 2008.