Listed firms postpone debt payments

Iris Gonzales (The Philippine Star) - May 10, 2021 - 12:00am

MANILA, Philippines — A large number of listed companies have maximized the leeway provided by the government in managing loans and financial obligations amid the lingering onslaught of the COVID-19 pandemic.

Megawide Construction Corp., for instance, signed an agreement with lenders to relax debt covenants for its end-2020 outstanding debt of P23.9 billion used for its Mactan-Cebu International Airport (MCIA).

This temporarily frees up approximately P3.6 billion in cash from 2021 to 2023 for GMR MEGAWIDE Cebu Airports Corp. (GMCAC), Megawide’s airport subsidiary.

Principal payments will be postponed to 2027 to 2029 when the travel industry is expected to have fully recuperated from the ill effects of COVID-19.

As the pandemic wreaked havoc on the travel industry, GMCAC formally solicited a 30-day grace period for its six-month debt servicing from Dec. 15, 2019 falling due on June 15, 2020 as provided under the “Bayanihan Act.” The lenders unanimously approved the request on June 11, 2020.

With travel continuing to be restricted, GMCAC requested for a further extension of settlement to September 2020, which GMCAC duly paid on Sept. 15, 2020, including additional interest on the principal and interest accruing from June 15 to Sept. 15 last year.

On Dec. 11, 2020, GMCAC sent notifications to its lenders to defer its principal and interest payments falling due on Dec. 15, 2020 to Feb. 15, 2021 as the pandemic intensified. On Dec. 15, 2020, GMCAC received a reply from the lenders unanimously approving the request.

GMCAC’s lenders are composed of the country’s largest banks, namely BDO Unibank Inc., Philippine National Bank, Bank of the Philippine Islands, Development Bank of the Philippines, Land Bank of the Philippines and Metropolitan Bank and Trust Company.

Dennis Uy’s PH Resorts likewise sought extension for the payment of its loans to fund its casino resort project in Cebu.

PH Resorts had a loan of P3.1 billion, a peso bridge loan facility and a $15 million loan facility.

On May 14, 2020, China Banking Corp. approved the extension of payment of principal and interest of the loans to June 18, 2020 under the Bayanihan to Heal as One Act. CBC further extended this loan to March 18, 2021. As of April 19, the negotiation for further extension of this loan is under process.

Uy’s Phoenix Petroleum likewise moved to refinance its loans and borrowings amounting to P9.4 billion and avail of repayment extensions for P3.7 billion worth of loans.

Other listed companies meanwhile tapped loans from state-owned financial institutions, which in turn, benefitted from the government’s increased capital infusion as a result of the COVID-19 pandemic.

Last month, Gokongwei-owned Cebu Pacific borrowed P16 billion in loans from a syndicate of banks, including Development Bank of the Philippines and Land Bank of the Philippines, to survive the difficult environment brought about by the COVID-19 pandemic.

So far, the DBP has extended P6.13 billion in loans to enterprises badly hit by COVID-19. It has earmarked interest subsidies amounting to P27.13 million to local government units.

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