Victorias Milling seeks 60-day extension

Victorias Milling Corp. (VMC) will ask the Securities and Exchange Commission (SEC) for an extension of at least 60 days to come up with the fresh P300-million capital infusion required under the SEC-approved rehabilitation plan for the publicly-listed integrated sugar milling firm.

In a disclosure to the Philippine Stock Exchange, VMC said its board of directors, during a meeting last week, decided to solicit bids for the P300-million capital funding and to request the SEC to extend its April 15, 2003 deadline by at least two more months.

The decision to seek additional time to inject new capital into the firm came on the heels of a string of offers from several groups, led by the JG Summit of the Gokongwei group, to provide the required funding.

VMC president and CEO Arthur Aguilar said the company’s 11-man board, now controlled by the creditor banks, opted for transparency in the bidding to make it more competitive and result in a more advantageous offer for the company.

This early, four groups have indicated interest in putting up the P300-million capital, either in the form of a loan or in exchange for equity in VMC.

Aside from JG Summit, other groups who expressed interest in VMC are the Negros-based Julio Sy group and Senoron group, and an unidentified party represented by the Filipino-Singaporean investment house ATR-Kim Eng Capital.

Last week, JG Summit Holdings Inc. proposed a total P2.3-billion buyout package to the sugar milling firm, with the P300 million as capital infusion in the form of a senior loan convertible to equity and P2 billion to "acquire all the rights, title, and interests of both VMC unsecured and secured creditors over their respective VMC shares, VMC convertible notes, and remaining debt and accrued interests."

Last December, VMC stockholders approved the firm’s quasi-reorganization and elected a new set of directors led by Philippine National Bank executive vice president Omar Byron Mier as chairman.

PNB had the biggest loan exposure among the 27 creditor banks of VMC, followed by the East West Banking Corp. of the Gotianun group, which was earlier reported offering to help raise the P300-million equity funding.

Based on the SEC-approved rehabilitation plan, the company has until April 15 or 120 days after the first board meeting to make the additional capital infusion.

Under the quasi-reorganization, VMC’s creditor banks converted P1.1 billion in loans into about 70 percent of VMC’s equity, while another P2.4 billion in debts will be restructured into a 15-year term loan.

VMC, the largest sugar mill operator in the Philippines and one of the largest in the Southeast Asian region, has been under a debt relief program with the SEC since mid-1997 as it incurred heavy losses from operations due to the prolonged slump in the sugar industry at the time.