Reynolds plan gets Landbank approval

The Land Bank of the Philippines (LBP) has approved the financial restructuring plan of Reynolds Philippines Corp. (RPC) which will hopefully bring the top aluminum maker back in operation.

In a disclosure to the PSE, RPC corporate information officer Maria Olivia Yabut-Misa said that as the company’s biggest stockholder and creditor, the approval of LBP would pave the way for securing similar approval of the remaining 67 percent of RPC’s bank creditors by the end of this month.

The agreement, she said, calls for the restructuring of presently secured loans into seven-year loans and the conversion of unsecured bank loans into equity of the company. Yabut-Misa said this would transform RPC into a new entity with majority ownership held by banks and with a drastically-reduced debt load.

"The company is also confident that the signing of the restructuring agreement will pave the way for the company’s ability to raise around P400 million of last-in, first-out (LIFO) funds to finance importation of raw materials and other working capital requirements, and pave the way for its long-term recovery as a viable and profitable company, Yabut-Misa said.

Last year, LBP took in a 36.7-percent stake in the company through 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 LBP of P400 million. LBP is a creditor/pledge 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 reduces 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 LBP, 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.

The country’s market leader in aluminum products, the company, however, closed down its manufacturing plant in Dasmariñas, Cavite last December due to its financial problems. — Conrado Diaz Jr.