First Pacific extends HK$10-M loan to RP unit of Metro Pacific

First Pacific Co. Ltd. has extended a HK$10-million (roughly P70.9-million) loan facility to its Philippine flagship Metro Pacific Corp. (MPC).

In a disclosure to the Philippine Stock Exchange yesterday, MPC said the loan facility, which will mature in end-2005, will be used to meet and fund the local units various general working capital requirements.

"The loan facility provides management with additional flexibility and strength with which to further its business restructuring efforts that have been effected in tandem with Metro Pacific’s ongoing debt reduction program," said David Nugent, MPC vice-president for media and corporate communications.

MPC expects it will be able to successfully generate sufficient cash from operations and disposals of non-core assets to service the loan’s interest payments in as well as certain other obligations.

The facility will carry a nine-percent interest per annum, payable monthly.

Nugent said while the company has explored other financing alternatives, including equity and equity-linked financing and bank borrowings, the company’s board believes that it is in the interest of Metro Pacific and the First Pacific group as a whole to proceed with the loan facility in view of the difficult funding conditions for Philippine companies.