BCDA rejects new proposal to restructure John Hay debt | Inquirer Business
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BCDA rejects new proposal to restructure John Hay debt

Considers legal option against Sobrepeña firm
/ 09:52 PM December 05, 2011

MANILA, Philippines—The Bases Conversion and Development Authority has rejected the proposal of the Sobrepeña-led Camp John Hay Development Corp. (CJHDevco) to again restructure its unpaid rentals for the Camp John Hay properties in Baguio City.

In an interview Monday, BCDA president and chief executive Arnel Paciano Casanova said CJHDevco wrote the BCDA less than a month ago requesting to restructure the current part of its debts, which now amounts to about P581 million.

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The group also wanted to restructure its arrears, which has ballooned to P2.6 billion, he said.

“They’re asking for another restructuring. That would already be the fourth. They want to restructure everything,” he told reporters. “We’re not amenable to that. We want them to just pay.”

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He said the BCDA was exploring different options on how to deal with CJHDevco, which has refused to pay the lease for the John Hay properties since late 2008.

Legal action, he said, was one of the options being considered.

The original lease contract for the John Hay properties was signed by the BCDA and CJHDevco in October 1996, but this was revised in July 2000, July 2003, and again in July 2008.

This last revision stated that the Sobrepeña-led company would pay its outstanding debt of close to P2.7 billion, representing unpaid lease rentals and interest charges.

The total arrears were trimmed down to just P2.4 billion following CJHDevco’s payment of P100 million upon the signing of the revised MOA and P180.3 worth of assets in a “dacion en pago,” or payment-in-kind transaction.

In an earlier interview, BCDA vice president for business development and operations Dean Santiago said the state firm had repeatedly sent demand letters to CJHDevco.

Instead of paying, however, CJHDevco allegedly just made a lot of alibis, including the alleged non-operation of the One-Stop Action Center (Osac) at the John Hay special economic zone.

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The Osac, managed by BCDA subsidiary John Hay Management Corp., was responsible for giving out the necessary business permits to locators within the economic zone.

Santiago belied CJHDevco’s claims, saying the Osac had always been operational and was even serving the needs of other locators, including Ayala Land Inc., for a business process outsourcing development within the area.

He added that it was strange that CJHDevco would use the alleged non-operation of the Osac as a reason for not remitting lease payments as the Sobrepena-led company used to pay its lease for the John Hay properties anyway. From July 2008 to November 2009, for example, it remitted lease payments amounting to P109 million.

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TAGS: Business, Camp John Hay Development Corp., company, Debt, Philippines
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