Quantcast
Latest Stories

Puregold settles P5-B debt ahead of maturity

By

Retailer Puregold Price Club Inc. decided to settle a P5.09-billion debt issue ahead of maturity because of a change in the tax treatment on proceeds from these securities, which otherwise would have made debt servicing more costly.

In a disclosure to the Philippine Stock Exchange, Puregold said it had remitted to Metropolitan Bank and Trust Corp.-Trust Banking the full amount as payment for corporate notes issued on Oct. 24, 2012.

Puregold had issued the corporate notes at an interest rate of 5.4481 percent per annum for the five-year tenor (worth P4 billion) and at 5.8673 percent per annum for the seven-year tenor (P1 billion). The issuance was arranged by First Metro Investment Corp.

A source privy to the transaction said Puregold’s issuance of corporate notes—or debt notes catering to no more than 19 selected institutional investors—was really meant to be a term borrowing.

However, the source said a recent clarification in the tax ruling of the Bureau of Internal Revenue would make it more costly for the company.

“Initially we did it on the basis of creditable withholding tax and then the BIR’s clarification said it’s subject to final withholding tax of 20 percent,” a company source explained.

Under the new scenario, the source said, Puregold would have to shoulder the final tax because the holders of corporate bonds would want to keep their yield in the same level as agreed upon.

“From our end it’s an additional cost,” the source said, thus explaining why Puregold had to terminate the loan ahead of maturity.

In lieu of this debt prepayment, the source said Puregold may instead source funding from bilateral loans from banks, thus taking advantage of record-low interest rates.

“We have practically zero availment of our bank lines and, given the continuing liquidity, the bank lines will cost much less,” the source said. “Anyway, we have a very strong cash position and we have a very substantial unutilized bank lines.”

The source added that the debt prepayment would be discussed when Puregold submits its first quarter financial results on April 26.

The source said the results of the first three months were “very good.”


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , debt issue , puregold

  • sanjuan683

    Baka magsarado yan Puregold kapag binuwisit ninyo. Maraming mawawalang ng trabaho.



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • Nebraska toddler gets stuck inside claw machine
  • Philippine eagle rescued by Army turned over to DENR
  • Gunmen attack Iraq military base, kill 10 soldiers
  • South Korea president shouted down by distraught parents
  • Classmates celebrating 60th birthday among missing in ferry sinking
  • Sports

  • Nadal passes clay landmark with 300th victory
  • Wawrinka waltzes through with Monte Carlo walkover
  • Power Pinays smash India in Asian Women’s Club volleyball opener
  • PH youth boxers off to stumbling start in AIBA World tilt
  • Durant has 42, Thunder beat Pistons 112-111
  • Lifestyle

  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • This is not just a farm
  • Clams and garlic, softshell crab risotto–not your usual seafood fare for Holy Week
  • Moist, extra-tender blueberry muffins
  • Entertainment

  • Jones, Godard, Cronenberg in competition at Cannes
  • Will Arnett files for divorce from Amy Poehler
  • American rapper cuts own penis, jumps off building
  • Jay Z to bring Made in America music fest to LA
  • Why Lucky has not bought an engagement ring for Angel
  • Business

  • Total says makes ‘very promising’ oil find off Ivory Coast
  • ‘Chinese Twitter’ firm Weibo to go public in US
  • World stocks subdued, Nikkei flat on profit taking
  • Asia stocks fail to match Wall Street gains
  • Fired Yahoo exec gets $58M for 15 months of work
  • Technology

  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Filipinos #PrayForSouthKorea
  • Taylor Swift tries video blogging, crashes into fan’s bridal shower
  • DOF: Tagaytay, QC best at handling funds
  • Smart phone apps and sites perfect for the Holy Week
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • Malaysia quarantines 64 villagers over MERS virus
  • DFA: 2 Filipinos survive Korean ferry disaster
  • PH asks airline passengers to check for MERS
  • Syria most dangerous country for journalists, PH 3rd—watchdog
  • Japan says visa-free entry still a plan
  • Marketplace