Court denies EastWest’s debt conversion in VMC
MANILA, Philippines – Victorias Milling Corp. scored victory in its legal battle with Gotianun-led East West Banking Corp. after the Court of Appeals denied the bank’s motion to convert its debt notes into equity in the sugar firm.
The CA effectively upheld the SEC’s decision last August, which denied the same motion filed by EastWest Bank.
In its ruling, the CA said VMC paid/redeemed the convertible note, which was issued in favor of EastWest Bank, in accordance with the terms and conditions of the alternative rehabilitation plan and the debt restructuring agreement the sugar firm executed with its creditors.
The group of taipan Lucio Tan owns at least 20 percent of VMC.
EastWest Bank earlier offered to rehabilitate VMC, which was once the country’s largest sugar mill.
VMC incurred significant losses from operations in the 1990s. On July 4, 1997, the company filed an application with the SEC for suspension of payments to creditors as debts ballooned to as much as P1.1 billion.
Based on its financial statements, VMC reported a 25 percent jump in comprehensive income to P1.08 billion for its fiscal year ending August 2015. Revenues reached nearly P5 billion during the same period.
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