Uniwide’s sad tale

Many are asking whatever happened to retail giant Uniwide whose outlets predated our megamalls.

Jimmy Gow’s Uniwide had its origins in Binondo in 1975, when it began as the Uniwide Sales Textile Bargaining House Center that sold textiles and clothing at bargain prices. With its masa appeal, the business rapidly expanded to include retail sales, real estate development and theme park operations. 

Back then, the Uniwide Group operated the Metromall in Las Piñas, 10 warehouse clubs and a department store that employed 3,000 employees and indirectly provided jobs to 15,000 more workers through its trade suppliers and concessionaires.

Before the 1997 Asian financial crisis, listed company Uniwide Holdings successfully raised P4 billion in its initial public offering (IPO) from both domestic and international markets. Also, at its peak in 1996 and 1997, the Uniwide Group generated an annual cash flow of P20 billion, making it the single largest retail group in the country.

 Now, Uniwide is embroiled in a nasty battle with the Securities and Exchange Commission (SEC) that wants to dissolve its group of companies and liquidate all its assets.

 The retail chain sought the help of the SEC when it went through dire financial straits in the late 1990s, not because of mismanagement or irregularities committed by its top executives, but because of the 1997 Asian financial debacle.

 Gow went to the SEC, hoping that the commission would help Uniwide recover. But instead of doing so, the SEC has subjected the Uniwide Group to a pseudo rehabilitation program for over a decade and, worse, now wants to dissolve it and liquidate its assets.

An interim receivership committee was formed by then SEC chairman Perfecto Yasay Jr. to look into Uniwide’s financial woes. Monico Jacob sat as chair of the committee, with Arthur Aguilar and Cornelio Peralta as members. 

But the term “rehabilitation” appears to be a misnomer in this case because a chronology of events ever since seemingly shows that there was no serious effort by the SEC to assist Uniwide in getting out of its financial rut.

Company insiders note that no honest-to-goodness rehabilitation program was actually put in place as the receivership committee formed to help Uniwide apparently had only one agenda from the start: to cannibalize the company and dispose off its assets, at the bank’s discretion with regard to the valuation of the dacion en pago arrangement.

And the sad part is that Uniwide, already deep in debt, not only had to give up its assets one after the other under the SEC-orchestrated dacion en pago with the banks and its other creditors; it even had to cough up more money to pay the exorbitant fees charged by the receivership committee and the advisers it had hired to supposedly work with the SEC in crafting a “rehabilitation” plan for the company.

This is on top of the two percent commission for any amount brought in for the Uniwide Group, which was reportedly requested by the rehabilitation receiver.

The committee made a big deal about a supposed “white knight”– a French retail company – that it was supposed to bring into the picture to rescue Uniwide.  But the deal did not push through after the Gows learned that this “white knight’s” concept of a financial rehabilitation was to buy out the Uniwide Group for a pittance instead of infusing new money into the corporation to re-energize its business operations. 

Under the deal worked out by the SEC panel, the French firm – Casino Guichard Perrachon – would buy out the Uniwide Group for just P5 billion so that it could take control of all its assets, including publicly listed shares, which were valued then at almost P30 billion combined.

On top of this, Uniwide also had to deal later on with a SEC special hearing panel (SHP) that eventually ruled that the revised rehabilitation program was no longer viable and should be terminated.

The SHP had based its decision to terminate rehabilitation proceedings on what are alleged to be erroneous facts. 

First, the SHP says that the Uniwide Group has no way of settling its debts because its liabilities totaled P12.292 billion. But according to the company,  its total liabilities as of end-December 2012 was down to around P1.3 billion.

Second, on the claim that Uniwide’s total assets are only P2.726 billion, it is argued that the appraised value of Metromall alone  is already at least P3 billion.

Third, as to the SHP’s claim that the proposed modification of the rehabilitation plan was strongly opposed by a majority of the secured creditors, the company says that out of the hundreds of creditors, there are only six creditors who opposed the rehabilitation plan, the most notable of which are the Philippine National Bank (PNB) and Allied Bank which represent just 15 percent of total secured credit.

Despite the erroneous basis for SHP’s findings, the SEC upheld the latter’s report  to terminate the rehabilitation proceedings. SEC chair Tess Herbosa then ordered the dissolution of the Uniwide Group, consisting of Uniwide Sales, Uniwide Holdings, Naic Resources and Development Corp., Uniwide Sales Realty and Resources Corp., First Paragon Corp., and Uniwide Sales Warehouse Club, so that the liquidation of assets can follow.

But the company insists that it is on track with the 15-year rehabilitation plan that the SEC approved in 2002, having fully settled 80 percent of all its obligations and the 20 percent balance due for settlement by end of this year.

So why is the SEC in a hurry to liquidate Uniwide? Are there people out to make a killing from Uniwide’s demise or is there another hidden agenda to all this? If indeed the company is on the road to recovery, then isn’t it the job of SEC to make sure that this is the case? After all, isn’t it what rehabilitation is all about?

For comments, e-mail at [email protected]