Lopez Inc in talks with creditors for restructuring of P1.8-billion debt

MANILA, Philippines - Lopez Inc. (formerly Benpres Holdings Corp.) is in talks with creditors to restructure P1.8 billion of debt in line with its goal to further pare down obligations, according to a top company official.

Lopez Holdings president and chief operating officer Salvador Tirona said negotiations center on a 12.5-year bullet repayment and a fixed rate of four to seven percent per annum.

Tirona said the Lopez holding firm’s priorities are to wipe out its deficiency and clean up its balance sheet so it can be in a position to declare dividends next year.

Lopez Holdings has significantly trimmed its debt from a high of $560 million in 2002 when it declared a debt standstill to P3 billion as of end-June this year.

The sale of key assets made it possible for Lopez Holdings to reduce its debt to a manageable level.

The Lopez clan has sold out of water distribution (Maynilad Water Services Inc.) and toll roads (First Philippine Infrastructure Inc.) businesses as well as most of its stake in the country’s largest power retailer, Manila Electric Co., to the First Pacific Co. Ltd. of Hong Kong led by Manuel V. Pangilinan.

In 2008, it also sold its 18-percent stake in The Medical City to an affiliate of Lombard Asia.

In the first half this year, Lopez Holdings posted net earnings of P11.38 billion or almost 24 times the P475 million recorded in the same period a year ago on the divestment by First Philippine Holdings Corp. of its 6.7-percent stake in Meralco.

Unaudited consolidated revenues rose 44 percent to P16.84 billion, mainly driven by the impressive performance of associate ABS-CBN Broadcasting Corp. which saw its earnings rise 179 percent on strong advertising minutes growth for flagship TV station, Channel 2.

Benpres is confident it would sustain its positive operating performance for the rest of the year given higher contributions from FPHC and ABS-CBN

FPHC is a leading investor in sustainable energy through First Gen Corp., manufacturing through First Philec Corp., construction through First Balfour, and property development through Rockwell Land Corp. and First Philippine Industrial Park. First Gen controls geothermal energy pioneer Energy Development Corp., natural gas power generators First Gas Corp. and several hydro facilities.

ABS-CBN is the country’s largest multimedia news and entertainment content provider and controls Sky Cable Corp., the country’s largest cable TV service provider.

Also under Benpres is Bayan Telecommunications Inc.