Steniel creditors agree to loan restructuring

The major creditor banks of listed packaging firm Steniel Manufacturing Corp. have agreed to a restructuring of the company’s existing loans by way of lower amortization and the extension of the principal payment period.

The company informed the Philippine Stock Exchange (PSE) that it has struck an agreement with the banking consortium made up of Metrobank, Chinatrust Phils. and BPI-Family Savings Bank to amend omnibus loan agreement dated Nov. 10, 2000.

A key feature of the changes involves the extension of the quarterly principal amortization, which was originally due to begin on June 2002, by another year to commence instead on June 2003.

Likewise, the amount of the quarterly amortization were reduced from P42.4 million to an aggregate amount of P14.65 million.

Moreover, Steniel officials said the company has been allowed to "dispose of certain non-core assets, the proceeds of which will be applied to reduce the final payment on the loan on maturity date."

Steniel, a former unit of the Metro Pacific group, started negotiations late last year with its creditor banks for the restructuring of about P851 million in loans as it conceded it would not be able to meet the Oct. 10, 2002 payment deadline as stipulated in the loan agreement.

Steniel was a 72-percent subsidiary of Metro Pacific Corp. (MPC) before it was sold in October 2001 to the regional investment firm CVC Asia Pacific Ltd. for P425.5 million.

MPC officials said Steniel was sold to CVC given its considerable experience in the paper packaging business in Europe. CVC Asia is an advisor to its parent company Citigroup on its investments in the Asia Pacific region. It also acts as an advisor to CVC Capital Partners Asia Pacific Ltd., managing over $750-million investment portfolio in Asia.

The sale of Steniel was part of the growing list of MPC units that had been disposed over the past four years, in line with the parent company’s asset rationalization and debt management program.

MPC’s asset disposal list had included its entire interest in Metro Bottled Water Corp. (P933 million) to La Tondeña; Metrolab Industries Inc. (P681 million) to Sara Lee; Smart Communications Inc. (P2.71 billion) to Japan’s Nippon Telegraph and Telephone Co.; Metrovet Inc. (P100 million) to Agribrands Animal Health of the US.

Last year alone, MPC’s banking arm, First e-Bank, transferred about P10 billion of its assets and liabilities to Banco de Oro of the SM Group, capping the year with another deal with Ayala Land Inc. and the Campos group for the sale of its controlling 50.38-percent stake in Global City developer Bonifacio Land Corp. for $90 million.