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Tuesday, September 07, 2004
Waterfront Phils., SSS in legal tussle over debt: execs
THE Gatchalian-led Waterfront Philippines Inc. (WPI) is now facing a legal battle against the Social Security System (SSS) for failing to pay its loan obligations to the state-run pension fund in time.
WPI chairman of the board Renato Magadia said the case is now in the regional court in Metro Manila. But WPI will be renegotiating with the SSS for further restructuring of the company’s remaining loan obligations.
According to a document, WPI obtained a P375-million five-year term loan from the SSS in 1999 to finance the completion of the Waterfront Cebu City Hotel and Casino (WCCHC).
WPI president Patrick Gregorio emphasized that WPI did not use WCCHC as collateral for the loan.
“It is secured by way of a first mortgage over parcels of land owned by Wellex Industries Inc. (WII), a related party, and by the assignment of 200 million common shares of the WPI,” he said on the sidelines of WPI’s annual stockholders’ meeting at the WCCHC over the weekend.
The loan, which is due on Oct. 29, bears interest at the prevailing market rate plus three percent or 14.5 percent per annum, whichever is higher.
On Aug. 7, 2003, the loan obligation to the SSS including penalties and interest was P605 million. WPI was considered in default, so SSS executed a foreclosure proceeding on the mortgaged land.
Magadia said WPI is fighting to implement the dacion en pago (payment in kind) over foreclosure of property as the former has higher valuation.
“We agree to a dacion en pago. But the valuation of the property remains to be the problem,” he said.
At present, the balance of the SSS loan is collateralized by 235 million shares of stock of WPI owned by The Wellex Group Inc. and 80 million shares of WII. JBN
(September 7, 2004 issue)
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