Lepanto Ceramics seeks court-assisted rehab

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MANILA, Philippines—Lepanto Ceramics Inc., the Laguna-based ceramic tile manufacturing unit of publicly listed Prime Orion Philippines Inc., is seeking court-assisted corporate rehabilitation in order to get some relief from its financial distress.

In a disclosure to the Philippine Stock Exchange, LCI said it had filed the petition for rehabilitation with the Regional Trial Court of Calamba pursuant to the “Financial Rehabilitation and Insolvency Act (FRIA) of 2010,” which makes court-supervised rehabilitation available for debtors who are able to get more than 50 percent but less than 67 percent creditor approval.

“With the rehabilitation program, LCI aims to achieve the following: (1) arrest the continuing losses for the past several years ;(2) ensure the continuing delivery of suppliers; (3) give LCI the chance to rebuild its business by utilizing its cash flow directly for operations and; (4) service the obligations with creditors,” the disclosure said.

Based on LCI’s latest annual filing at the Securities and Exchange Commission, the company has suffered recurring losses from operations and has a capital deficiency amounting to P3.5 billion as of end-June 2011. It had total assets of P1.17 billion while total current liabilities amounted to P4.55 billion. Most of its liabilities are owed to related parties while there are real property taxes owed to the City of Calamba which the company has offered to settle by surrendering certain parcels of land.

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  • Anonymous

    About a year ago, I had the opportunity to meet with one of the LCI Executives and presented to him a marketing plan that would practically overhaul its marketing strategy and depart from the conventional ceramic marketing philosophy (age old industry practice).  Unfortunately, for whatever reason, he did not appreciate the marketing plan. Maybe at that time, he thought it was just too radical.   But if they gave it a chance, it is possible LCI would not be seeking a rehab now.

    At any rate, it is still not too late.  With the court assisted rehab, that marketing plan that I proposed could still be implemented, and who knows, it might be the “Knight in Shining Armor” that could save LCI.

  • Anonymous

    Puro na kasi smuggled ang tinda sa Pinas…

    Unless we put a stop to smuggling, any plan is just delaying the inevitable.

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