Vista Land and Lifescapes [VLL 1.64 ?0.6%; 18% avgVol] [link] notified investors that it has “secured financing” to pay off the P10 billion in retail bonds that were set to mature yesterday. VLL will use shareholder advances to pay off the bonds. No details were provided.
MB BOTTOM-LINE: Shareholders' advances are usually loans from the controlling shareholder to the company, and they’re a useful tool to get things done quickly, like in this case with bonds that were set to mature rather imminently. There’s a very good chance that VLL was trying to obtain the P10 billion needed to pay these bonds from some other source, like bank loans, a preferred share sale, or through a new bond offering. I don’t have any information as to why those efforts came up short, if that’s what they were trying to do. I only know it’s rather odd for a company of this size to be taking P10 billion shareholder advances to pay down maturing obligations, especially for a company like VLL that is no stranger to selling debt and raising money through preferred share sales.
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