Citing its listing rules, the PSE said the filing of proceedings for suspension of payments by a listed company shall merit an immediate suspension of trading of the firm’s security.
This might also result in the delisting of Philrealty from the PSE board as stipulated in the exchange’s listing rules.
Under the rules, a listed company which has been ordered liquidated or is the subject of legal proceedings under the Insolvency Law can already be considered for delisting.
Owned by the Ortigas scion, Philrealty was last traded at P0.02 per share. It was listed with the PSE in September 1987. The company’s office is located in Pasig City.
Due to liquidity problems as a result of the continued slump in the real estate industry since 1997, Philrealty sought a moratorium on the payment of its debts to prevent creditors from instituting foreclosure proceedings.
Philrealty has been hard-pressed to service its total P3.76 billion liabilities and finance its working capital needs.
A continued decline in sales was experienced which was compounded by high interest rates. The property market depends heavily on bank financing for its growth, but the economic crisis not only resulted in prohibitive lending rates but restricted credits to the real estate industry as well.
As a result, the company registered a consolidated net loss of P168 million in the first nine months of the year, substantially lower than the P633-million net loss incurred in the same period last year.
Lacking funds, Philrealty suspended the development and completion of real estate projects such as the Manila Golf Crest, Ivy League Square, and Urdaneta Country Plaza. The company also implemented cost-cutting measures including the reduction of its workforce.
Philrealty plans to explore various alternatives on how to go about its rehabilitation, including the settlement of its obligations to creditors by way of dacion en pago (debt-to-asset swap) of its real properties; the sale or transfer of its assets; conversion of obligations into equity (debt-to-equity swap); modification of shareholders’ rights; issuance of bonded indebtedness; and the restructuring of its obligations.
Since 1998, the company has been offering land properties to the banks as payment of its obligation through dacion en pago arrangements.
Once a high-profile real estate company, the publicly-listed Philrealty is primarily known for its projects in the Ortigas Center, foremost of which is the Textite Towers – the headquarters of Philippine Stock Exchange.
Its other projects and landbank include the Alexandra Condominiums in Ortigas, the Andrea North mixed-use complex in Quezon City, and lot properties in Tagaytay, Batangas, Quezon and Rizal.
Management believes that an improvement in the stability of the Philippine economy could translate into positive results on the company’s operations. "But until that recovery in the economy comes into view, the company will have to rely on its own initiatives in order to ensure its survival," Philrealty said.