Trading in Victorias Milling shares resumes today

MANILA, Philippines - Trading in shares of Victorias Milling Co. Inc. will resume today (May 21) after a 15-year hiatus, opening up  a mechanism for equity investment.

The PSE resolved to lift the trading suspension, effected on Oct. 10, 1997 at the height of the Asian currently crisis, after VMC settled all accrued obligations to the local bourse. It was last traded at P0.29, giving it a market capitalization of P587.14 million.

The trading freeze was brought about by VMC’s filing of a petition for a suspension of debt payments and rehabilition following findings of alleged fraudulent misrepresentation of material information.

VMC president Wilson Young said the company is grateful for the Securities and Exchange Commission’s unflinching support to the sugar firm’s rehabilitation as well as the PSE for allowing the resumption of trading of its shares.

“VMC also  recognizes the continued support which its creditors have provided it in all these years and its shareholders for their patience and understanding.  To its  trading partners, the company is equally grateful,” VMC said in a statement.

Young said the company is holding close consultations with various shareholders/creditors with the aim of bringing down its P5.86 billion debt to a sustainable level as it prepares for the expected reduction of sugar tariff from 28 percent to five percent by 2015.

The resumption of trade should encourage VMC convertible note holders to convert into equity which should strengthen VMC’s financial position, Young said.

The company has about P1.98 billion worth of outstanding debt notes that are convertible into equity. 

“The management assures all stakeholders of its continuing efforts to address the various financial issues and the challenges which the Company will be facing  in the future,” VMC said.

The Lucio Tan Group was VMC’s white knight, injecting the necessary funds to keep the sugar miller float.

Young said they are proposing to prepay P500 million in convertible notes and convert into equity the remaining convertible notes and  slash interest rates on a restructured debt to eight percent from 10 percent per annum on the peso-denominated loans.

Upon completion of the P1.48 billion debt-to-equity conversion, creditor-banks are seen to raise their shareholdings in the sugar firm to 74 percent from 54 percent.

Among VMC’s creditor-banks include Philippine National Bank, East West Bank, Metrobank, and Development Bank of the Philippines.