Benitez family calls on STI to accept “fair and just” P550M debt settlement
THE BENITEZ family has called on the STI Education System Holdings led by businessman Eusebio Tanco to accept a P550-million debt settlement – an amount seen by the family as “fair and just” – in relation to a soured joint venture on Philippine Women’s University.
The offer from the family which controls PWU, however, has been rejected by Tanco. A series of foreclosure proceedings on property assets in Manila, Quezon City and Davao City had already been initiated by STI.
In letter addressed to STI president Monico Jacob dated Feb. 4, the Benitez family’s corporate arm Unlad Resources Development Corp. proposed this settlement, of which the downpayment of P150 million was committed to be paid within three weeks after an agreement on the settlement is reached while the balance of P400 million would be paid within six months.
“For the good of the school and most especially the students, we have no desire to further escalate the tension between the STI group and the Benitez family. Therefore, we would like to propose……the total amount of P550 million,” Unlad president Patrick Caoile said in the offer.
“We believe that the above schedule/terms of payment is a workable, rational, and reasonable solution that shall safeguard the school and at the same time provide STI Holdings a rate of return for its loans to PWU and Unlad,” Caoile said.
Asked about the settlement offer, Tanco said in a text message on Monday that it’s “not acceptable.” Tanco added: “Besides, they are not credible as far as I am concerned.” He said it would now be up to the courts to resolve this matter.
STI Holdings previously acquired PWU’s loan with Banco de Oro Unibank worth P223 million in 2011 and likewise extended a P198 million loan to Unlad.
Tanco’s group, however, has declared the Benitez family in default of its obligations late last year and demanded P923 million as payment for the loans.
The family, for its part, called the declaration of default “illegal and baseless” and filed a case before a Manila court last month contesting the declaration.
In a previous statement, PWU Media Director Lydia Benitez-Brown said the family’s offer was based on a fair settlement in ongoing efforts to find a mutually acceptable resolution. “We are raising the money to settle our obligations to Mr. Tanco. When STI issued its illegal declaration of default last December, it was based on an unreasonable demand that we settle P923 million in seven days. These are the kind of unacceptable terms that hinder efforts to reach an amicable settlement,” Brown said.
“Our offer is based on the premise of a fair and just settlement. It is certainly not open ended as Mr. Jacob claims, nor was it offered merely for ‘public consumption.’ It is a firm and formal offer, and it is one that the Benitez family fully intends to deliver. But as we have repeatedly stated, we shall honor all our commitments to Mr. Tanco and STI but only under fair and just terms,” Brown added.
From the point of view of the Benitez family, when STI took over the loan from BDO, Tanco had agreed to waive all interests, thereby challenging the P923 million debt default declaration. For its part, the STI group said interest would have been waived only if the Benitez family had complied with the original agreement to pay STI in the form of shares in Unlad.
Under the agreement, STI was supposed to have been paid through the conversion of all its loans into 40-percent equity in Unlad, which in turn was to absorb all the real estate assets of PWU in a share-for-property swap and manage PWU. But because STI was never paid with shares in Unlad, the STI has charged cumulative interest on top of the P550-million principal debt owed by the Benitez family.
