June 4, 2010
Vitarich mulls over options to trim debt
Poultry and animal feeds producer Vitarich Corp. said Thursday it is weighing three options to reduce its PHP3.2-billion debt.
Vitarich said in a disclosure to the stock exchange that its board gave the go-signal to consider the sale of non-core assets, conversion of debt into equity or an increase in the company''s authorized capital stock to PHP500 million, using proceeds from the second option.
Vitarich under the debt-to-equity conversion plan will issue 90 million worth of shares to creditors interested in the scheme. The shares will then be listed in the Philippine Stock Exchange.
"What the board and the rehabilitation receiver of the company have in mind is to issue these shares to the creditors of the company who are willing to convert the debts of the company into equity. These shares will be offered to the creditors for their consideration and evaluation," Vitarich said.
Creditors of the company have not yet approved of the plan.
The proposed issuance of shares will need shareholders'' approval during the annual stockholders'' meeting of the company slated this month. Vitarich plans to submit the plan for approval of the rehabilitation court.
According to the company, this plan is expected to be implemented within one year after the said approval by the rehabilitation court. If implemented successfully, this plan will provide the company with more relief and time to build up its resources and eventually pay off a substantial portion of its debts.
Vitarich has around PHP3.2 billion in debt owed to creditor banks led by Metropolitan Bank and Trust Co.
The poultry producer said it was pressed to seek the assistance of the court for rehabilitation in 2006 because of the adverse market and financial conditions it experienced in the past 10 years.