Benpres offers investments to pay $400-M debt

Benpres Holdings Corp., the publicly-listed investment holding firm of the Lopez Group, is working on a new deal with creditors that will allow it to restructure $400 million of its debt over a 10-year period mainly through the sale of its investments in the tollways and telecommunications businesses.

Benpres president and chief operating officer Angel S. Ong said the company intends to settle $200 million from dividends provided by core investments in the power and media industries while another $200 million is proposed to be swapped for shares in First Philippine Infrastructure Development Corp. (FPIDC) and Digital Telecommunications Philippines Inc. (Digitel).

Ong said Benpres can raise $140 million from the sale of its 49-percent stake in FPIDC, which centrals the Manila North Tollways Corp. (MNTC), and less than five percent in Digitel.

Ong said Benpres, which received P508 million in dividends from power holding unit First Philippine Holdings Corp. in 2005, expects to generate P15 billion in dividends from First Holdings and media subsidiary ABS-CBN Broadcasting Corp. over the next 10 years.

Ong said the holding firm also continues to entertain parties who wish to acquire its other investments such as Bayan Telecommunications Holdings Corp. and cable service provider Beyond Cable Holdings Inc.

Creditors are set to complete due diligence on Benpres this month to be followed by a new commercial term sheet negotiation to begin in the third quarter of this year, he said.

"Discussions with creditors started in 2002, We expect very soon to engage in intense discussions with them and hopefully come up with a new term sheet," Ong said.

Ferrier Hodgson Corporate Advisory (WA) Pty Ltd. is the current financial adviser of Benpres while White and Case provides legal advice.

Ong said among the other options being considered to trim debt is the sale of secondary shares by FPIDC.

Metro Pacific Corp., the local flagship of the First Pacific Group of Hong Kong, has already signified interest to acquire MNTC, which operates the North Luzon Expressway.

Benpres chairman and chief executive officer Oscar Lopez said while the company seeks agreement on the terms of a realistic and workable debt restructuring, it will continue to look at ways to further enhance the value of its investments.

For ABS-CBN Broadcasting Corp., Lopez said the group’s goal is to work towards regaining leadership in primetime TV ratings in Mega Manila. "The recently instituted approach of using integrated distribution channels for news and current affairs is expected to bear gains for ABS-CBN in the near future, coupled with the headcount reduction program completed in 2005. Future growth is anchored on the overseas global business with the landmark agreement between ABS-CBN and DirecTV in the US," Lopez said.

As for BayanTel, the goal is to sustain gains in revenues and operating income and to continue to look for ways for Bayantel to develop its niche in wireless communications. "It will be extremely difficult to crack the duopoly currently enjoyed by the leading mobile phone operators but there should be other ways to further build value into BayanTel," Lopez said.

For MNTC, the group intends to attain the needed traffic volume. Since MNTC started commercial operations on Feb. 10, 2005, traffic volume on the NLEX has always been its primary concern in view of the high cost of fuel and toll rates and competition from toll-free MacArthur Highway.

For property unit Rockwell Land Corp., the group’s objective is to ensure steady cash flows in order to reduce debt level and allow it to finally start its dividend payout. To sustain this for the long-term, Rockwell will venture into more affordable condominium projects and lower-risk horizontal development projects.