Lepanto Ceramics seeks court-assisted rehab

MANILA, Philippines—Lepanto Ceramics Inc., the Laguna-based ceramic tile manufacturing unit of publicly listed Prime Orion Philippines Inc., is seeking court-assisted corporate rehabilitation in order to get some relief from its financial distress.

In a disclosure to the Philippine Stock Exchange, LCI said it had filed the petition for rehabilitation with the Regional Trial Court of Calamba pursuant to the “Financial Rehabilitation and Insolvency Act (FRIA) of 2010,” which makes court-supervised rehabilitation available for debtors who are able to get more than 50 percent but less than 67 percent creditor approval.

“With the rehabilitation program, LCI aims to achieve the following: (1) arrest the continuing losses for the past several years ;(2) ensure the continuing delivery of suppliers; (3) give LCI the chance to rebuild its business by utilizing its cash flow directly for operations and; (4) service the obligations with creditors,” the disclosure said.

Based on LCI’s latest annual filing at the Securities and Exchange Commission, the company has suffered recurring losses from operations and has a capital deficiency amounting to P3.5 billion as of end-June 2011. It had total assets of P1.17 billion while total current liabilities amounted to P4.55 billion. Most of its liabilities are owed to related parties while there are real property taxes owed to the City of Calamba which the company has offered to settle by surrendering certain parcels of land.