Listed holding firm Lopez Holdings Corp. hopes to finally rid itself of its bad debt before the year ends as the company gets its books in order to support its subsidiaries.
From a high of as about $560 million in 2002, Lopez Holdings said its bad debt has been trimmed to less than $2 million. This allowed the company to issue cash dividends for the first time in its history in 2011, followed by another payout this month.
Much of the debt was either restructured or paid for by the company using proceeds from the sale of major assets, notably the group’s majority stake in Manila Electric Co. (Meralco).
Last year, the company launched a tender offer to buy back $35 million worth of debt—using internally generated funds—still held by the firm’s creditors.
“The deal is still on the table, but now, were practically debt free already. Our obligations are insignificant from where we came from,” Lopez Holdings said in a statement.
Lopez Holdings president Salvador Tirona said the company’s debt was insignificant compared to the company’s asset value.
He said the holding firm’s 60.3-percent stake in media conglomerate ABS-CBN Corp. and 46.6-percent interest in renewable energy producer First Philippine Holdings were worth a combined P32.3 billion—more than enough to cover the firm’s loans.
Lopez Holdings chair Manolo Lopez, in his message to shareholders, said the holding firm’s improved financial condition would help it provide more support to its operating units.
The company’s power unit First Philippine Holdings was looking to expand operations in Indonesia. This comes after the signing of a deal with an Australian partner that will allow First Philippine Holdings to develop geothermal resources in Chile and Peru.
Locally, Lopez said the company was keen on participating in any renewable power-related public-private partnerships (PPP) that the Aquino administration would put on the auction block.
Meanwhile, Lopez said ABS-CBN would work to maintain its position as one of the country’s premiere broadcast networks amid heightened competition for both ads and talent coming from businessman Manuel V. Pangilinan’s TV5 network.
Lopez Holdings posted a net income of P2.64 billion in the first quarter of the year, up from P902 million last year, benefiting from the proceeds of the group’s sale of shares in Meralco to the Pangilinan group.