Uniwide cries foul over liquidation order

MANILA, Philippines - The listed unit of the Uniwide Group of Companies is crying foul over the corporate regulator’s plan to liquidate the former retail giant.

In a disclosure to the stock exchange, Uniwide Holdings Inc. said it is “unfair that the corporation be dissolved and liquidated.”

As early as December 2012, Uniwide said it filed petitions before the Securities and Exchange Commission (SEC) as the company planned to negotiate with its creditors “because it believes it is on the road to recover its financial standing.”

Last week, SEC ordered the liquidation of all assets of cash-strapped Uniwide Group of Companies, ending the decade-long saga for the wholesale and retail firm.

The corporate regulator ordered the dissolution of all the companies in the group, namely Uniwide Sales Inc., Uniwide Holdings, Naic Resources & Development Corp., Uniwide Sales Realty and Resources Corp., First Paragon Corp. and Uniwide Sales Warehouse Club Inc.

SEC said the group had a large capital deficit, which ballooned to P9.567 billion in September 2009 from P1.362 billion in December 2002.

However, Uniwide Holdings said records show “that obligations were substantially paid in 2010 and the obligations due to the creditors were substantially reduced.”

Uniwide Holdings did not provide specific figures.

“There are no indications that fresh capital is forthcoming to rescue the Uniwide Group. These considerations convinced the SHP that [Uniwide Group] can no longer be rescued,” SEC said last week.

Early in the rehabilitation phase of Uniwide Group, there were reports that several interested parties led by the US Wal-Mart chain and two investor groups from Hong Kong and Taiwan have sent feelers for exploratory buy-in negotiations. However, no agreements pushed through.

At the time of filing its rehabilitation plan in 2001, Uniwide had secured debt of around P5.82 billion and was solvent as assets exceeded its liabilities. From 2003 to 2009, Uniwide’s total liabilities consistently surpassed total assets. As of 2010, assets were almost depleted, amounting only to P2.726 billion as against liabilities of P12.29 billion.

Under the rehabilitation plan, the assets of the Uniwide Group, as well as personal properties of the Gow family that are being held by creditors as security for their loan, will be used to settle the outstanding debts of the group.

It also includes the dacion of assets to the Uniwide Group’s secured creditors and the settlement to its unsecured creditors through the cash flow of the retail operations.