RFM readies cash dividends for preferred shareholders

RFM Corp. will be paying holders of its preferred shares around P82 million in accumulated cash dividends, including two deferred payment schedules since July last year.

In an advisory to the Philippine Stock Exchange, RFM said it will pay all the cash dividends due to its preferred shareholders on Jan. 11, 2002 covering three quarterly periods: from April to July 2001, July to October 2001, and October 2001 to January 2002.

Except for the period from April to July wherein each preferred share gets a corresponding cash dividend of P0.1167, the two succeeding quarterly dividend payouts amounted to P0.1180 each.

The Concepcion-owned holding firm has some 232.62 million in outstanding convertible preferred shares. In the year 2000, RFM granted nearly P109 million in total cash dividends on a quarterly basis, on per share dividends also at the ratio of P0.1167 and P0.1180.

But by mid-2001, RFM Corp. asked for the deferment in the grant of the cash dividend to holders of its preferred shares as the company negotiated the payment for the restructuring of its dollar-denominated bonds and other maturing obligations.

RFM said that despite the deferment, the holders of RFM preferred shares will still be entitled to receive dividend which is cumulative in the years when no dividend is declared, pursuant to the company’s articles of incorporation.

The consummation of the P14-billion sale of its softdrink subsidiary Cosmos Bottling Corp. (CBC) to the San Miguel group last Jan. 3, 2002, however, greatly enhanced RFM’s liquidity position as it was able to fully pay P1.25 billion worth of long-term commercial papers and other loans as well as buy out its foreign partner WP Argosy’s 21-percent stake in the company.

Before the sale of CBC, RFM had been exploring options to raise enough cash to pay off $65 million in maturing bonds, to add up to the estimated $36 million in net proceeds from the earlier sale of its two subsidiaries – Consumer Savings Bank and the Nasdaq-listed PSi Technologies Holdings.

RFM said it needed more time in meeting the redemption payments due to a tempopary cashflow mismatch and had planned to meet the obligations through a combination of asset sale, new borrowings and internally-generated funds.