Documents at the Securities and Exchange Commission (SEC) disclosed that the BPI has filed its comments on the second amended rehabilitation plan for the Uniwide Group where it said it was not opposed to the plan provided further amendments were made.
In an official comment filed by the BPI, the bank said it was "not opposed in principle to the second amended rehabilitation plan," adding that it "in fact believes that the second amended rehabilitation plan is viable."
However, BPI branded as "onerous and unfair" some provisions of the term sheet indicated for BPI, saying that it was being forced to take a "substantial haircut" on its exposure.
According to sources, the BPI was still against accepting delivery of the two Uniwide properties through a special purpose vehicle (SPV) instead of being allowed to effect a non-contested foreclosure proceeding over the properties.
Since the bank would have to pay for the expenses of transferring the property, BPI said the foreclosure route was the less expensive option.
"BPI is (also) willing to take the risk of a third party submitting a bid lower than BPI’s exposure during the foreclosure sale," the bank said.
According to the bank, the SEC should at least give it six months to effect the transfer in a mode other than SPV, following the approval of the rehabilitation plan.
"Hopefully by that time the SPV Act proposed by Congress would have been passed into law and even the SPV route may no longer be as expensive," the bank said.
BPI also contested the leaseback proposal for one of the properties, specifically a lot along Avenida, which the rehabilitation plan pegged at P125 per square meter for the first year with five percent escalation annually for the succeeding years.
According to the BPI, a rental rate closer to P200 per square meter per month for five years should be a fairer alternative.
Uniwide’s creditors has been clamoring for the SEC to terminate the company’s recovery program following its failure to clinch a deal with a prospective investor that would infuse much-needed fresh capital into the group.
Creditors argued that since the SEC approved Uniwide’s rehabilitation plan in 2000 and its succeeding amendments, the company has not been able to implement the recovery program as its supposed "white knight" – French retail giant Casino Guichard-Perrachon – backed out from the deal last January.
Based on the rehab plan, Uniwide will stick to its core business of retailing to make the balance sheet of its flagship unit Uniwide Warehouse Club Inc. free of bank debts. This will be done through a combination of dacion en pago arrangements of non-operating assets and cash payment.
Casino was supposed to infuse fresh capital amounting to P3.57 billion in exchange for management control of the company but the French firm decided it was not yet ready to come into Uniwide’s rescue.