Metro Pacific sees turnaround this year

Metro Pacific Corp., the local flagship of Hong Kong’s First Pacific Co. Ltd., is hoping to end the year in the black as it expects negotiations with creditors for the full repayment or restructuring of its debts to be completed.

MPC chairman Manuel V. Pangilinan said the company’s goal this year is to retire all its debts which have weighed down on its profitability over the past years.

"We are likely to report a profit in 2003. Our goal is to reduce parent level debt to practically zero this year. When this happens, the profits of our operating subsidiaries will flow through," Pangilinan said during the company’s annual stockholders meeting.

With the completion of the Larouge transaction on April 17, which saw the repayment of P4.8 billion of debt, and other agreements that have been successfully concluded by way of dacion or by restructuring, the remaining debts to be addressed by MPC now stands at only P2.5 billion.

"Metro Pacific anticipates achieving substantially the goals of its debt reduction program which was started in late 2001 by the end of 2003. It is our intention that agreements or agreements in principle be concluded with the holders of these debts by end 2003," Pangilinan said.

Last April, the memorandum of agreement signed by MPC, Ayala Land and Greenfield Development Corp. for the repayment of P4.8 billion Larouge loan was concluded. Ayala Land and GDC acquired the principal of MPC’s $90 million loan from Larouge, a First Pacific subsidiary, with a cash payment of $90 million. In exchange, MPC transferred its 50.4 percent interest in Bonifacio Land Corp.

MPC chief financial officer Jose Ma. Lim, added that the company expects to fully settle its debt through restructuring or dacion en pago (payment-in-kind scheme).

Lim said the company recently reached an agreement with creditors for the restructuring of P1.4 billion debt out of MPC’s remaining P2.5 billion in debts.

In addition to the Larouge loan repayment, MPC had concluded individual agreements with a number of Philippine-based lending institutions resulting in the repayment of various debts totalling P1.2 billion.

It had also reached agreements in principle for the repayment via dacion of P1.3 billion in liabilities to several of Philippine-based lenders.

On April 14, 2003, MPC entered into an agreement to settle a loan granted by Export and Industry Bank with principal and interest amounting to P1.6 billion. The terms of the settlement calls for the purchase by third parties of the loan by delivery of asset-backed notes. The closing of the transaction is scheduled on June 30 or earlier as the parties may agree.

As it nears the completion of its debt reduction program, MPC will continue to improve further the robust performance of shipping subsidiary Negros Navigation Co. Inc. and upscale property unit Landco Pacific Corp.

"Our area of focus for 2003 will be to continue planning for the valuable real estate assets that Metro Pacific owns across the Philippines. From the 10.4 hectares in the Bonifacio Global City to prime resort areas in Luzon, Visayas, and Mindanao, it is our intention to remain a significant participant in the real estate industry for a long time to come," Pangilinan said.

Despite a generally weak travel sector throughout 2002, Nenaco increased its share of the Philippine freight shipping sector due to the successful cost-cutting measures implemented by management.

Landco’s projects, on the other hand, continued to gain acceptance from a broad range of buyers throughout the Philippines.