Metro Pacific gets parent firm’s assistance in financial deals

Metro Pacific Corp. (MPC) is slowly losing its grip on managing its own finances as its parent company, Hong Kong-based First Pacific Co. Ltd., has taken a more direct hand in MPC’s financial restructuring program.

In a statement, MPC said Larouge B.V., a wholly-owned First Pacific subsidiary, will now co-manage the ongoing sale process for MPC’s 69.6-percent controlling stake in Bonifacio Land Corp. (BLC), the private consortium developing the Bonifacio Global City in Makati.

BLC owns 55 percent of the corporate vehicle for the Bonifacio Global City project, the Fort Bonifacio Development Corp. (FBDC), which is a partnership with the Philippine Government (through the Bases Conversion Development Authority) holding the remaining 45-percent stake.

The entry of Larouge came about after MPC defaulted on its $90 million loan last Dec. 31, 2001. The loan was extended by Larouge in April 2001 and is secured by a 50.4-percent interest in BLC held by MPC.

However, Larouge indicated that when an agreement for such as sale is reached, it would offer the 50.4 percent stake in BLC, which it holds as a secured creditor as part of the sale transaction.

In the meantime, MPC said it is in the process of finalizing a plan to reduce its existing financial obligations and would announce the details not later than end-February 2002.

With the exclusion of the debts of BLC and FBDC, MPC owes about P12 billion out of which P5 billion comes from the First Pacific group and P7 billion from third party creditors.

Late last year, MPC said it would divest of its stake in BLC – giving up control of the ambitious Bonifacio Global City project – as a debt reduction measure primarily to address its third party loans.

Aside from the assistance extended by Larouge, the parent unit has also taken a more active role in MPC’s management with some of its top executives tasked to occupy sensitive positions in the local company.

Last November, the MPC board installed First Pacific executive director Edward Tortorici to fill up one of the remaining vacant seats in the board. To further complement MPC’s executive lineup, two more First Pacific executives have also been assigned to assist on MPC-related matters.

Aside from backstopping for Manuel V. Pangilinan — himself the executive chairman of First Pacific, which he founded in 1981 – Tortorici’s appointment was also intended to fill in the vacuum created by the departure of Ricardo Pascua as MPC president and CEO.

The MPC board accepted Pascua’s resignation effective Dec. 31, 2001, along with his other positions in the MPC group (FBDC, BLC, First e-Bank, Landco Pacific Corp. and Negros Navigation Co.) due to his involvement in a group vying to take over majority interest in BLC.

With Pascua’s exit, Pangilinan has assumed the multiple roles of president and CEO, on top of his chairmanship and COO positions, until such time that MPC’s debt level and cash flow have been sufficiently addressed.

Besides Pangilinan and Tortorici, two other former First Pacific executives sit on MPC’s 14-man board of directors: chief financial officer Grant Ferguson and Christopher Young.