MANILA, Philippines—Sugar miller Victorias Milling Corp. has obtained board approval to slash its debt stock by P1.42 billion, thus gaining some leeway in debt management.
In a disclosure to the Philippine Stock Exchange on Monday, VMC said it would cut debt stock by redeeming P1.42 billion in convertible notes pursuant to the company’s restructuring agreement with creditors. This debt includes the principal amount of P762.18 million and interest of P639.82 million, based on company estimates.
VMC, deemed as a success story in creditor-driven rehabilitation program, has been working to improve operating efficiency over the years. It has likewise cut its debt stock by retiring some obligations ahead of maturity and converting debt notes into equity.
By addressing this P1.42 billion in debt, VMC’s total principal debt stock is estimated to go down to about P737.85 million. Annual interest to be paid on the balance is estimated at P59 million.
VMC pays 8 percent per annum on the principal amount of these convertible notes.
Every year until the convertible notes fall due in 2018, holders of VMC’s debt notes have the option to convert their exposure into equity.—Doris C. Dumlao