Lopez firm cuts debts to $7.5M

Lopez Holdings Corp., formerly known as Benpres Holdings, has cleaned up its balance sheet by reducing costly IOUs to a meager $7.5 million after ending a recent offer to buy back its remaining debt paper.

The unrestructured debt has gone down from a high of $560 million in 2002 when soured investments in water distribution and telecom—aggravated by the peso devaluation that jacked up the servicing of its foreign-denominated debts—forced the company to seek debt relief.

Lopez announced last Friday the expiration of its tender offer for eurobonds and long-term commercial papers (LTCPs) that gave creditors the opportunity to sell about $41 million back to the company at full face value.

At the closing of the offer, a total principal amount of $13.97 million of the eurobonds, representing 71 percent of these instruments, were validly tendered and redeemed by the company.

A total of P785.3 million in LTCPs, representing about 91 percent of the outstanding amount, were validly tendered. Lopez also announced it had received the consent of a majority of the LTCP holders for the proposed amendments to the trust agreement.

The offer to purchase the LTCPs and the consent solicitation began on August 3 and expired on September 1. Securities Transfer Services Inc. served as the information agent for the offer to purchase the LTCPs and the consent solicitation.

The payment date for both offers is expected by September 6.

The tender offer is part of the financial-restructuring process being undertaken to ensure the company’s long-term financial health.

After the crippling impact of the Asian currency crisis, the sale of stakes in toll roads, increased property development and a tertiary hospital helped the company recuperate during the last five years. The company has been buying back debt paper using dividends provided by profitable investments in media/broadcasting (ABS-CBN Corp.) and power generation (First Philippine Holdings).—Doris C. Dumlao