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LEGAZPI CITY: Lafayette Mining Ltd. announced on
Thursday that the Rapu Rapu Group is filing a petition for
rehabilitation, not bankruptcy as earlier reported in the media.
Lawyer Bayani Agabin, legal
counsel of Lafayette Philippines, said rehabilitation means
operations will continue and people would remain employed.
Agabin clarified this matter as
news broke out that the mining firm has declared bankruptcy, the
Philippine News Agency reported.
He explained “bankruptcy would
mean mining operations stop, people would be laid off and the
remaining assets sold but this is not the case at hand.”
Agabin said the project is viable
but needs breathing space as far as paying obligations is concerned.
“It is not closing down, is definitely not bankrupt, and simply
needs time to get back on its feet by being allowed to suspend
payment of its present obligations.”
While payment to creditors and
suppliers will be suspended, they will also be required to continue
providing services and supplies and would be paid on a cash basis.
The Rapu Rapu Group of Companies
will seek court protection this week from creditors following a
decision by Lafayette Mining Ltd. to go under voluntary
administration.
Carlos G. Dominguez, chairman and
president of Lafayette Phils., which oversees the Rapu Rapu Group,
said the local units will file a petition for rehabilitation so it
can continue normal operations, which is the best way to protect all
its stakeholders, particularly its host communities, employees, and
the environment.
The rehabilitation petition is
expected to result in a court order instructing the group’s
present creditors and suppliers to continue their services and
transactions with the local companies for as long as they are paid
on cash basis.
Under the rehab petition payment
for existing debts will be suspended until the court has approved a
rehabilitation plan that will fairly settle all outstanding debts
and ensure the continued operations of the company.
The voluntary administration of
LML was reached after its board deemed that it could not continue to
meet its obligations as and when they fall due.
Dominguez, in a press statement,
said “this temporary legal process we are going through is
actually a blessing for the Rapu Rapu project because it will
resolve the financial issues the local management team has been
urging LML to address.”
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