Petrocorp needs $100M to pay debts, finance operations

Petrochemical Corp. of Asia Pacific (Petrocorp) will need fresh capital of about $100 million or P5 billion to pay off some of its debts and for additional working capital.

This was disclosed yesterday by Petrocorp chief executive officer Henry Leung who said that the petrochem firm has not been able to operate profitably since it started operation in 1998 due to the general decline in economic activity.

Petrocorp along with two other petrochemical firms are also facing stiff competition from imported polypropylene resins.

Petrocorp, Leung admitted has been talking to some interested investors who see the potential of the petrochem industry.

"But the investors are adopting a wait and see attitude due to what they feel as political instability," Leung said.

He said Petrocorp is in the process of restructuring its debts as the company has been experiencing difficulty in paying interest on its loans.

Petrocorp is operating at only 50 percent of its capacity.

Petrocorp’s major shareholder is Chemical Industries of the Philippines with a 35 percent stake; followed by the family of Carlos de Leon, 15 percent; PNOC Petrochemical Development Corp, nine percent; William Gatchalian, seven percent; BASF of Germany, seven percent; Basic Petroleum, six percent; and All Asia Capital with four percent.

"The petrochemical industry is already reeling from the general depressed economy and is facing stiff competition from smuggled and cheap imported resins," Leung said.