Platinum Plans gets debt relief

Platinum Plans Inc. has secured a debt reprieve from a local court after finding merit in the cash-strapped pre-need firm’s petition for rehabilitation.

In an Oct. 14 order, Makati Regional Trial Court Judge Romeo Barza said "on the basis of the allegations in the petition and the rehabilitation plan, "the court finds that Platinum Plans stands a chance of being restored to a successful operation and solvency if given an opportunity to be rehabilitated under a viable rehabilitation plan."

Barza has appointed Antonio Tupaz as rehabilitation receiver. His task is to evaluate the rehabilitation plan submitted by Platinum Plans and submit his recommendation to the court not later than 120 days from Aug. 24, 2005.

The Securities and Exchange Commission and several creditors earlier filed their opposition to Platinum Plans’ petition on the ground that the pre-need firm is already insolvent as its liabilities had already exceeded its assets.

Based on the computations made by the SEC’s Non-Traditional Securities Department, the liabilities of Platinum, amounting to P3.2 billion, had already exceeded the company’s assets which are currently valued at P2.9 billion.

In its petition filed with the court, Platinum said given enough breathing space it would be able to settle all maturing obligations given the realizable value of its existing assets.

Platinum is reportedly locked in negotiations with a Canadian firm that has offered to buy out the pre-need firm from the controlling Salas family.

Platinum, however, said it remains uncertain whether a deal could be closed between the company and the prospective investor due to the current controversies and the consequent operational and financial difficulties plaguing it. It said the prospect of getting a "white knight" will require a period for normal due diligence.

Platinum said getting a foreign investor will strengthen not only the company but restore credence and confidence in the pre-need industry as well.

According to the pre-need firm, its existing long-term commitments towards planholders will be better protected with new resources and management.

Aside from a white knight, Platinum will also source fresh funds of P75 million to settle maturing plans.

Platinum also plans to offer a new homeowning system addressing the contractual savings capabilities of overseas Flipino workers and developing non-performing assets of banks suitable for housing for which the pre-need firm can earn a hefty income estimated to be P2.2 billion from just one specific property.