Lopez Holdings, UnionBank sign debt repayment accord

MANILA, Philippines - Lopez Holdings Corp. (formerly Benpres Holdings Corp.) has inked a debt repayment scheme with Aboitiz-owned Union Bank of the Philippines for the restructuring of $19.93-million Eurobonds.

In a disclosure to the Philippine Stock Exchange, Lopez Holdings president and chief operating officer Salvador Tirona said the settlement of this debt would pare down the company’s remaining obligations to $25 million and P875 million.

Tirona said the primary financial terms of the settlement include a bullet repayment of the principal amount in 12.5 years from the effective date at a fixed interest rate of four percent per annum gross of final tax.

He said the company’s offer to existing creditors for the settlement of remaining debts under mutually acceptable terms remains in place.

Tirona said the holding firm’s priorities are to wipe out its deficiency and clean up its balance sheet so it can be in a position to declare dividends next year.

Lopez Holdings has significantly trimmed its debt from a high of $560 million in 2002 when it declared a debt standstill to P3 billion as of end-June this year. 

The sale of key assets made it possible for Lopez Holdings to reduce its debt to a more manageable level.

The Lopez clan has sold out of water distribution (Maynilad Water Services Inc.) and toll roads (First Philippine Infrastructure Inc.) businesses as well as most of its stake in the country’s largest power retailer, Manila Electric Co., to the First Pacific Co. Ltd. of Hong Kong led by Manuel V. Pangilinan.

In 2008, it also sold its 18-percent stake in The Medical City to an affiliate of Lombard Asia.

In the first half this year, Lopez Holdings posted net earnings of P11.38 billion, or almost 24 times the P475 million recorded the same period a year ago, on the divestment by First Philippine Holdings Corp. of its 6.7 percent stake in Meralco.

The company said it is confident it would sustain its positive operating performance for the rest of the year given higher contributions from FPHC and ABS-CBN.

FPHC is a leading investor in sustainable energy through First Gen Corp., manufacturing through First Philec Corp., construction through First Balfour, and property development through Rockwell Land Corp. and First Philippine Industrial Park. First Gen controls geothermal energy pioneer Energy Development Corp., natural gas power generators First Gas Corp. and several hydro facilities.

ABS-CBN is the country’s largest multimedia news and entertainment content provider and controls Sky Cable Corp., the country’s largest cable TV service provider.

Also under Lopez Holdings is Bayan Telecommunications Inc.