In May 2002, United Silicon purchased the smelting plant for P112 million on an installment basis for five years, with the first amortization to start in April 2004.
In a disclosure to the Philippine Stock Exchange (PSE), API said United Silicon failed to make good on its commitment for the amortization schedule and had decided to revert back to the Araneta-owned company the ownership and physical possession of the smelter plant.
As a result, API said United Silicon forfeited all payments made representing downpayments for the said conditional deed of sale. United Silicon had also booked losses on the disposal of said assets. API, which is engaged in real estate development, has taken over the smelter plant last May 20.
United Silicon had planned to rehabilitate and operate the plant for the smelting of micro silica, a raw material in the production of high grade cement.
API said the extent of rehabilitation work on the plant by United Silicon has yet to be ascertained, as well as the determination of the added life as a result of said rehabilitation, pending submission of the appraisal report.
The company has not yet started regular commercial operations of its real estate operations due to the regional crisis that hit the real estate industry in 1997.
As of the end of the first quarter this year, API continued to run a deficit mainly because of its pre-operating status. The firm incurred losses of P16.1 million in 2004 and P15.4 million the previous year.
API’s funding requirements for the next 12 months will be sourced from the cash inflows from its joint venture project with Sta. Lucia Realty and Development Inc.
Both parties are fine-tuning the master plan for the proposed project, which includes the development of 1,500 hectares of land in San Jose del Monte, Bulacan. The development consists of a mixed-use residential/commercial subdivision with a country club. The project is expected to be completed over a four-year period.
API, formerly known as Integrated Chrome Corporation, was originally organized to mine chrome ore and produce ferros metal or commonly known as ferrochrome. It changed its name and its primary purpose to that of land and property development in 1997 with the entry of the Araneta group.