EAST West Banking Corp. (EWBC) on Thursday said it will appeal the decision of the Court of Appeals on its motion for reconsideration in connection with its petition to convert its debt notes in Victorias Milling Co. Inc. (VMC) into equity.
In a disclosure to the Philippine Stock Exchange, the Gotianun-led bank said: “The external counsel of the Bank will appeal the CA decision and resolution with the Supreme Court through a Petition for Review on Certiorari.”
The bank said its external counsel “reported that it received on 27 May 2016 a Resolution dated 16 May 2016 of the Court of Appeals (CA) denying the Bank’s Motion for Reconsideration of the Decision dated 19 January 2016.”
VMC is the country’s biggest sugar miller and is engaged in integrated raw and refined sugar manufacturing with plant facilities in Victorias City, Negros Occidental.
In January this year, the CA affirmed an en banc ruling of the Securities and Exchange Commission (SEC) denying the petition of EastWest Bank to swap convertible notes amounting to more than P300 million issued by the sugar miller into equity.
The court further held that VMC paid and redeemed the convertible note in line with the terms and conditions of the Alternative Rehabilitation Plan and the Debt Restructuring Agreement entered into between VMC and its creditors on April 29, 2002.
Previously, the debt-saddled miller was able to convert some P1.1 billion of its debt from its unsecured creditors at a ratio of P1 of debt to P1 of common stock.
Thus, in denying the motion for reconsideration against such decision, the Special 8th Division of the CA on May 16 said that EWBC cannot compel the sugar miller to exercise its option for the conversion of the unconverted debt notes.
“A considered scrutiny of the arguments set forth in Petitioner EWBC’s Motion for Reconsideration directed against the CA’s January 19, 2016 Decision, as well as those in VMC’s Comment/Opposition, elicits the finding that there are no new grounds or bases sufficient to compel modification or reversal of the said challenged Decision,” the ruling of the CA read.
Last February, the Lucio Tan Group expanded its interest in VMC from 23.6 percent to 28 percent by acquiring P660 million worth of its shares from Hong Kong-based First Pacific Company Ltd. at P5 share.
Under the deal, VMC reacquired 300 million shares, while the LT Group through its subsidiary purchased about 131.9 million shares.