PPI did not apply for the renewal of its dealership license in September 2004 after it transferred its assets to the now defunct Lifetime Plans Inc.‚ registration certificate has been revoked by the SEC in April for failure to comply with certain requirements.
An SEC official said the corporate watchdog found it reasonable to approve PPI’s request considering it is under rehabilitation.
The Yuchengco-owned pre-need firm was given a new lease on life after its proposed rehabilitation plan was cleared by the Makati Regional Court. This despite the strong opposition from the SEC and the company’s planholders.
The SEC insisted that PPI, as consolidated with Lifetime Plans, has sufficient funds to pay the benefits of its planholders.
The Makati RTC has appointed Mamerto Marcelo as rehabilitation receiver for PPI. He is tasked with evaluating the rehabilitation plan in connection with the concerns of various creditors.
Marcelo was given 120 days from Oct. 5 to submit a report containing his recommendations.
The Makati RTC said the questions on the figures disclosed in PPI’s financial statements and how best to rehabilitate PPI are best left to the court-appointed rehabilitation receiver to evaluate and study them.
In its proposed rehabilitation plan, PPI said it would need at least P300 million in fresh capital infusion to allow planholders the option to encash their entitlements under an exit mechanism that will convert their open-ended plans into a fixed-value plan contract.
The fixed-value plans will be secured by $51.8 million worth of National Power Corp. (Napocor) bonds which are guaranteed by the government. These bonds, which mature in July 2010, are sufficient to cover all obligations to its over 34,000 planholders, PPI said.
PPI said the terms of the exit mechanism are more advantageous to planholders than those provided under the plan in case of voluntary termination.
For a fully-paid non-availing plan, the entitlement is computed on the basis of seven-percent net per annum yield on the planholders’ contributions from the date of full payment on record.
Upon surrender by the planholders of the plans in exchange for the new plans, PPI will be considered discharged from all obligations under the plans.
To provide additional liquidity, PPI has also proposed to issue preferred convertible shares at 11 percent interest. These preferred shares shall be fully retired in five years.