Debt-laden Vitarich Corp. is converting into equity some P2.38 billion owed to Kormasinc at one share per peso of liability.
The poultry and animal feeds firm said in a disclosure to the Philippine Stock Exchange that its board of directors had approved the assignment of some 90 million unissued common shares to Kormasinc.
Similarly, some 2.29 million shares will be issued to Kormasinc as debt payment when the Securities and Exchange Commission approves an increase in Vitarich’s authorized capital stock.
In August 2012, Vitarich’s board decided in two separate meetings first to raise the company’s authorized capital stock to P1.5 billion from P500 million, and then a further increase in capitalization to P3.5 billion.
According to the Bulacan-based firm’s latest quarterly report issued last month, its borrowings total at about P3.08 billion as of June 30 this year—all of which came from domestic lenders.
Vitarich’s latest unaudited consolidated financial statement lists some P1.18 billion in current liabilities, of which P72.5 million is part of restructured debt.
Once a major player in the domestic poultry industry, Vitarich suffered in the wake of the Asian financial crisis of 1997-1998.
The company’s financial problems worsened with the avian flu outbreak in 2003, which dampened sales of poultry products.
Vitarich, which was placed under corporate rehabilitation in 2006, operates several feed mills, hatcheries and dressing plants.
Its products include live and dressed chicken, animal and aqua feeds, day-old chicks, and animal health products.
Vitarich has four subsidiaries—swine breeder Luz Farm Inc., animal health and nutritional products manufacturer Gromax Inc., Precision International Research and Diagnostic Laboratory Inc., and Sarmiento Foundation Inc.