Pryce Corp to file petition for debt relief

Listed holding company Pryce Corp. will file a petition for the suspension of debt payments and rehabilitation to prevent its creditors from instituting foreclosure proceedings against its assets.

In a disclosure to the Philippine Stock Exchange (PSE), Pryce said it is left with no choice but to seek debt relief from the courts in order to protect and preserve itself while a viable and acceptable rehabilitation plan is being worked out.

Pryce said its shareholders have already approved the company’s resolution to file a petition for rehabilitation and to take all actions or matters necessary to rehabilitate the firm.

These measures include the settlement of debt by way of dacion-en-pago of its properties, the restructuring of its obligations, the conversion of debt into equity, the increase or decrease of its authorized capital stock, and the issuance of bonded indebtedness.

Pryce said its assets which are mortgaged to creditors face an imminent danger of being foreclosed or attached to the prejudice of the other creditors of the corporation, its shareholders and the company itself.

In view of this development, the PSE suspended indefinitely the trading of Pryce shares beginning yesterday. The suspension was made in compliance with the listing rules of the exchange.

Under the amended listing rules, an announcement by a listed company of an intent to file or the actual filing of proceedings for suspension of payments shall merit an immediate suspension of trading of security of the listed firm.

Since the Asianwide financial crisis erupted in July 1997, Pryce has found it difficult and was unable to service its loans as they fell due.

Pryce was incorporated as a real estate development company. It operates primarily in Mindanao, particularly in cities like Cagayan de Oro, Davao and Iligan. The company’s real estate undertakings include the development of memorial parks, residential and commercial properties and hotel operations.

However, in 1997, LPG and industrial gases became the company’s dominant business, compelling the company to change its name and primary purpose from that of a property company to a manufacturing company.

Pryce Gases Inc. (PGI), a subsidiary of Pryce, is currently under rehabilitation. Based on the recovery program submitted to the Makati Regional Trial Court, Pryce shall offer its real estate assets as partial payment of the obligations of PGI to its creditors.

The plan was filed by PGI creditors International Finance Corp., the private sector financing arm of the World Bank, and the Netherlands Development Finance Co.

As of April 30, 2002, PGI was estimated to have owed its banks and financial creditors a total of P2.671 billion or approximately $53.5 million, of which about 44 percent was due to IFC and NDFC combined.

PGI has been in default on its interest payments to IFC and NDFC since December 2000 and on its principal payments since December 2001.