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By Likha C. Cuevas-Miel, Reporter
BENPRES Holdings Corp. said it plans to cut its
debt in half within 2 years by raising money from the sale of shares
in its toll roads unit, among other fund-raising activities.
On the sidelines of its stockholders meeting,
Angel S. Ong, Benpres president and chief operating officer, told
reporters the conglomerate is selling part of its one-third stake in
Manila North Tollways Corp. (MNTC). The parent hopes to raise at
least $100 million, either from a private placement or through a
secondary share offering, through unit First Philippine
Infrastructure, Inc. (FPII).
“This has been ongoing for a few years but
it’s just a question of value. We’re not desperate to sell it.
If the price is right. Hopefully the Rockwell IPO can still happen.
But then this sub prime thing happened in the US that’s why it’s
on hold right now,” Ong said, referring to Rockwell Land Corp.’s
earlier plan to sell shares to the public for the first time.
FPII fully owns First Philippine Infrastructure
Development Corp. (Fpidc), which then owns 67 percent of MNTC and 46
percent of the Tollways Management Corp. (TMC). Benpres also owns
24.5 percent of property developer Rockwell.
After the sale, Benpres will indirectly own MNTC
and Rockwell through First Philippine Holdings Corp. (FPHC), the
holding firm of the Lopez group’s infrastructure and power
businesses. ABS-CBN Broadcasting Corp., Bayan Telecommunications,
Inc. and Sky Cable Corp. will all be left under Benpres’ direct
ownership. Capital raising and expansion for its businesses will be
done through its subsidiaries, Ong said.
In addition to the asset sale, the conglomerate
will receive dividends from its other investments, mainly ABS-CBN
and FPHC, to help pay down its debt by 50 percent from its current
$365 million.
Benpres has embarked on a financial
restructuring program to trim $560 million in obligations incurred
in 2002. A quarter of this came from its past involvement in
Maynilad Water Services, Inc., control over which has since moved to
the government, and last year to the DMCI-Metro Pacific Investments
Corp. consortium. In April, Benpres disposed its entire stake or 18
percent in Professional Service, Inc., owner and operator of Medical
City in Ortigas Center, Pasig, to an affiliate of Lombard Asia III
for P600 million.
Lombard Asia III is the third Asian-centered
private equity fund managed by Lombard Investments, Inc., an
international private equity investment manager that operates in
Bangkok, Hong Kong and San Francisco. Lombard has made more than 75
controlling and minority investments in Asia and North America.
At-end 2007, Benpres trimmed its outstanding
debt from $400 million to $367 million. Of the $400 million, P2
billion were long-term commercial papers (LTCPs) and $150 million
Eurobonds bearing 7.875 percent interest. About $210 million are
contingent obligations of its subsidiary, Bayan Telecommunications.
In November last year, Benpres and Lopez, Inc.
purchased $32.3 million of the $43 million worth of debt held by
Asian Infrastructure Fund. This was about 10 percent of the total
outstanding principal debt of Benpres at that time. The conglomerate
assumed $25.8 of the purchased obligations while Lopez Inc. paid
$6.4 million.
Benpres also bought back P5.8 million or 60
percent of the P9.5 million worth of debt from five holders of its
LTCPs.
Ong said Benpres submitted its proposal to
creditors in August last year with regard to the retirement of the
company’s debt or possible agreements to restructure financing of
these obligations within 12 years.
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