Reynolds to go into debt restructuring

Reynolds Philippines Corp. will be undertaking a major debt restructuring program aimed at converting the remaining creditors into stockholders, after the Land Bank of the Philippines (LBP) took in a 36.7-percent stake in the company.

In a disclosure to the Philippine Stock Exchange (PSE), RPC corporate information officer Ma. Olivia Yabut-Misa said a nine-man board management committee (BMC) will be formed to review, evaluate, and implement the debt restructuring plan as well as business plans and programs, capital expenditures and projects of the company.

The BMC will consist of the company’s president, Jaime Gonzales, chief financial officer/treasurer, Jorge Navarra, six appointees of Landbank and one appointee of PentaCapital Investment Corp., the financial advisor for the debt restructuring program.

Yabut-Misa said as a major component of the restructuring plan, the company will negotiate with its creditors for the conversion of their debts into equity.

"In view thereof, there is a need to increase the company’s authorized capital stock from P1 billion to P3 billion," she added.

Last July, Landbank acquired 36.7 percent of RPC in a debt-to-equity swap with RPC’s single biggest stockholder Profinda Holdings Corp., which owned 42.1 percent of the outstanding capital stock.

The transaction, valued at P54.18 million based on RPC’s last traded price of 15 centavos each, secured RPC’s loan obligation to Landbank of P400 million. Landbank is a creditor/pledgee of 376,242,648 RPC shares of stocks under a deed of pledge executed and delivered by Profinda Holdings.

With the share assignment, Profinda effectively reduced its stake in RPC but remains in control along with its partners such as the All Asia Capital group and Japan’s Marubeni Corp.

Aside from Landbank, other government financing institutions (GFIs) holding a sizable stake in RPC are the Social Security System (2.18 percent) and the AFP Retirement and Separation Benefits System (0.29 percent).

RPC was established in 1954 by Reynolds International Inc. of the US mainly to manufacture and distribute aluminum sheets, foil and extruded sections used in the packaging, container, construction, appliance manufacturing and vehicle manufacturing industries. – Conrado Diaz Jr.