RPC corporate information officer Ma. Olivia Yabut-Misa told the Philippine Stock Exchange that the company was recently advised by its financial advisor PentaCapital Investment Corp. of Metrobank’s decision which, together with the previously secured approvals from top creditor Land Bank of the Philippines and Asiatrust Bank, establishes a majority 67-percent approval share among its secured bank creditors.
Yabut-Misa said that with this development, the company and PentaCapital are "optimistic that the execution of the restructuring agreement shall be concluded within the next 60 days."
Last year, RPC embarked on a major debt restructuring program aimed at converting its remaining creditors into stockholders, after LBP look in a 36.7-percent stake in the company via a debt-for-equity swap with RPC’s single biggest stockholder Profinda Holdings Corp.
With the share assignment, Profinda effectively reduced its 42-percent 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).
Under the restructuring plan, RPC’s presently-secured loans will be converted into seven-year loans with a two-year grace period, or zero notes. It also provides for the conversion of unsecured bank loans into preferred shares that may be changed into common shares at the option of the creditor.
"These schemes aim to transform the company into a new entity with its majority ownership held by banks and with a drastically reduced debt load," Yabut-Misa said.
Based on projections, the company will enjoy strong cash flows and earn steady profits. These will be given back to the creditor-banks by way of an earnings recapture clause.
In addition, common stocks may be sold anytime when the market prices become favorable for liquidation, which means the creditor-banks can look forward to an early exit instead of waiting for the entire restructuring program to run its full course.