Uniwide in buyout talks with several groups

Debt-laden retailer Uniwide Holdings Inc. confirmed yesterday it is in talks with several investors for a possible buyout deal.

In a disclosure to the Philippine Stock Exchange, Uniwide said: "We confirm that we have received feelers from a number of investors for Uniwide. However, in view of confidentiality concerns of these investors, we could not disclose the identity of these interested parties."

Analysts are speculating that businessman Lucio Co, owner of the Puregold chain of duty-free stores, is among those who have signified interest in taking over Uniwide, which has still quite a number of real estate assets even after the settlement of some of its debts through dacion en pago or the payment-in-kind scheme.

The acquisition talks have boosted the share price of the discount retail club operator. Last Wednesday, Uniwide shares closed at 26 centavos per share or 27 percent higher. Yesterday, however, Uniwide closed 5.8 percent lower at 24.5 centavos on profit-taking.

Some analysts said Uniwide could still be a good target since it has been slowly recovering from its deep financial problems. The company has settled nearly half or P4.62 billion of its P10.45 billion debts to banks and other financial institutions, suppliers, contractors and tenants, bringing down total debt to only P5.82 billion.

Under its amended rehabilitation plan, Uniwide will settle P2.59 billion in obligations to unsecured creditors through the conversion of 50 percent of the unsecured debt into 15-year convertible notes that are redeemable anytime at Uniwide’s option.

The other half of the unsecured debt shall be restructured into a 10-year loan with zero interest, a grace period of three years and whose principal payment will start only on the fourth year. The restructured debt will be paid from the cash flow from the retail operations.

As for its secured debt, Uniwide is presently negotiating with investors from Hong Kong for the operation of Coastal Mall (Manila Bay). The company is looking at a fresh infusion of P700,000 which will be used to pay off creditor-banks.

In June 1999, the Uniwide group was forced to file in court a petition for suspension of debt payments as a result of the economic crunch and and a failed diversification strategy.

The Uniwide Group is composed of Uniwide Sales Inc., Uniwide Holdings Inc., Naic Resources & Development Corp., Uniwide Sales Realty & Resources Corp., First Paragon Corp., and Uniwide Sales Warehouse Club Inc.