PSE threatens to freeze trading of 2 listed firms

The Philippine Stock Exchange threatened anew to suspend trading of stocks of two listed companies and extend the suspension in another issue for their repeated failure to comply with the PSE’s reportorial requirements.

In a memorandum, PSE president Ramon T. Garcia said the Exchange "shall consider implementing a trading suspension" on the shares of C&P Homes INC. and Reynolds Philippines Corp. and retain the suspension of Mondragon International Philippines Inc.

All cases stemmed from the firm’s non-compliance with the Exchange’s structured reportorial requirements, wherein listed companies are directed to submit 200 copies of their annual reports (using SEC Form 17-A) for the fiscal year ending Dec. 31, 2000 and pay the basic and daily fines.

Garcia said the suspension will take effect on July 3, 2001, upon recommendation of the Listing Committee and approval of the PSE Board of Governors, unless compliance with the requirement is made on or before the said date.

Last year, the PSE imposed similar trading halt on a number of listed issues, including the three companies, for failing to submit on time the required financial documents. In fact, trading in MIPI has remained suspended since last year when the Gonzalez-owned leisure resort developer encountered further problems at the Mimosa Leisure Resort in Clark.

The operations of the leisure resort were taken over in December 1999 by its lessor, Clark Development Corp., for Mondragon’s failure to pay back rental amounting to over P400 million as well as for allegedly violating certain terms in its lease agreement. In addition, Mondragon owes roughly P5 billion to a local bank consortium.

Likewise, C&P Homes and Reynolds are both having difficulties servicing their debt obligations and are negotiating for loan restructuring deals with creditors. Early this month, C&P’s parent firm, Fine Properties, sold an 11.6 percent stake in the housing developer to Ayala Land Inc. as refund for an earlier deposit ALI made for a land sale three years ago but which was not consummated.

C&P has been pursuing a debt restructuring program with its creditors since 1999 as it fell victim to the real estate slump buffeted by the regional financial crisis, the peso devaluation, higher interest rates and more rigid terms of the government’s shelter program which dried up funding for socialized and low-cost housing projects.

C&P has debt stock that includes a $150-million floating rate note, a P3-billion long term commercial paper and P5 billion owed to various banks.

Reynolds, meanwhile, recently settled a price rigging case lodged by the PSE and pursued by the SEC as its stocks made a surprising surge both in volume and value middle of last year, even though the company has been struggling to cope with continued losses and maturing debts.