Vitarich Corp. is anticipating court approval for its exit from corporate rehabilitation by September, as the company wraps up settlement of its outstanding debt.
Ricardo Manuel Sarmiento, Vitarich chief operating officer and executive vice president, said in a briefing Monday that the company had pared down its debt from P3.2 billion to some P300 million.
By means of an ongoing debt-to-equity conversion scheme, the animal feeds and consumer food manufacturer is working on a clean slate with help from global investment firms ADM Capital and Altus Capital, through special purpose firm Kormasinc Inc.
Under a program of debt restructuring, about P2.38 billion of the company’s debt will be converted into equity.
Besides that, Vitarich sold for P610 million a non-core manufacturing facility in Marilao, Bulacan.
Sarmiento said proceeds from the sale would be used to pay off a large portion of the remaining debt, and also as additional working capital.
He said Vitarich decided to sell considering that engaging toll processors for the manufacturing of feeds, instead of keeping the Marilao plant, would mean lower cost of operations.
Sarmiento said that after seven years of rehabilitation and given recent developments, the company had taken a huge leap toward reclaiming its leadership in the domestic food and agricultural feeds industry.
“We are relaunching our core products, particularly the Golden Dory line, which we expect to be out September,” he said, adding that the company’s entire product portfolio was being revamped.
The COO said that Vitarich’s emergence from rehabilitation would renew confidence among its customers, clients and even lenders.
Currently, the company has outstanding obligations totaling some P300 million, including those that have been incurred in the course of operating amid rehabilitation.
“We are in talks with Kormasinc on this remaining debt,” Sarmiento said. “We believe that this could be settled within the year.”
He noted that recent developments had prompted the Securities and Exchange Commission to allow Vitarich to sell shares to the public, although this also needs approval from the Philippine Stock Exchange.