Benguet Corp. gets breather from debts to pursue projects

BENGUET CORP. announced Friday that majority of its creditors have withdrawn notices of default, giving the country’s oldest miner some breathing space to pursue revenue-generating mining activities, a company official said.

“We can devote more time and resources to improving operations,” Benguet CFO Renato A. Claravall said in a phone interview.

Among Benguet’s projects, the Acupan gold mine in Benguet province is already productive. While production is presently small at 350 to 375 ounces of gold a month, selling the yellow metal to the Banko Sentral ng Pilipinas gives the company regular revenues. Benguet is preparing to improve production at Acupan.

The company also wanted to see the Sta. Cruz nickel mine in Zambales province opened next, Claravall said.

In a disclosure to the Philippine Stock Exchange, Benguet enclosed a letter from Philippine National Bank stating: “In our capacity as trustee in the mortgage trust indenture dated Dec. 22, 1993, by and between Benguet Corp. and PNB Trust Banking Group, we have received notices from the creditors of the company, holding 79.9 percent of its debt paper, that they have withdrawn their respective notice(s) of default to the company.”

“Moreover, the majority creditors, which had previously issued written instructions to the trustee to declare the secured obligation covered by the mortgage trust indenture as due and payable, have ceased to be creditors of the company after having sold their debt paper to Benguet Corp.”

“As a consequence, PNB Trust Banking Group, as trustee, no longer has the mandate of the majority creditors to declare the secured obligations of the company to be due and payable and hereby withdraws the notice(s) of default issued to Benguet Corp. last July 24, 2009.”

On March 11, Benguet said in a statement sent via e-mail and also posted on the Philippine Stock Exchange website that it had bought back “a substantial portion” of its debts.

Benguet said that it wanted to fully settle its debts before the year ended.

“This development augurs well for the implementation of the various mining projects of the company,” said Benguet president and CEO Benjamin Philip G. Romualdez.