PNB told to negotiate with ex resort owner

The interested Korean buyer of the controversial Coral Reef Resort in Mactan Island is asking the Philippine National Bank (PNB) to agree on a compromise deal with the property's former owner to hasten the re-opening of the 36-hectare resort and golf club.

The interested Korean buyer, Sea Born and Fil Kotchi consortium represented by Chang Nam Moon said while his group cannot pursue a buy-out negotiation with the former lead owner of the resort Kenichi Akimoto, Moon said the group wants PNB to clench a compromise arrangement with Akimoto.

There is an ongoing case filed by Akimoto's Group versus the Lucio-Tan led PNB, accusing the latter that it implemented an illegal foreclosure of the property last year.

"The terms of conditions was changed after the loan was constituted," legal counsel Judge Romulo Senining said.

While there is a case ongoing, any interested buyer cannot negotiate either with the PNB or the former owner companies led by Akimoto.

In a press conference, Moon said the Korean consortium buyer has put up US$100 to US$200 million capitalization fund, in order to start drawing an investment plan for the idle Coral Reef Resort and Golf Club, provided that the pending case in the court will be wrapped up and will end up in a good compromise negotiation.

Three years ago, Moon said his group has sent a letter to PNB expressing interest to acquire the property, but it got no reply from the bank.

According to Moon, the consortium is ready to re-develop the property to transform it as a retirement village, which will target the huge Japanese, Korean and Chinese retirees.

"We hope PNB will compromise with Akimoto," Moon said in a press conference. Akimoto is the chairman of the board Palm Tree Estate Inc. and Bell Air Golf and Country Club, the former owner of Coral Reef Resort.

However, for his part, Department of Tourism (DOT) secretary Joseph Ace Durano said as long as the government is concerned, Coral Reef will only negotiate with the PNB, as the court has already granted the title to the bank. The government owns minority ownership of the PNB.

Sea Born company, which Moon represents, is engaged in Pearl based jewelry trading in Korea and exporting Pearl jewelry raw material primarily to Hong Kong, Japan, and Korea.

Palm Tree Estate Inc. and Bell Air Golf and Country Club was able to secure a loan from PNB in 1997 of P340 million, and second loan of P80 million, for the development of Resort's expansion to build condominiums and exclusive golf club.

The construction of the expansion project started in 1994. The company was granted the loan three years later while the economic crisis hit the Asian region, affecting badly the Philippine economy. PNB reportedly released the loans in tranches which crippled the company's ongoing project that time.

"We had to close the resort's operation and stop the ongoing construction because of lack of funds in 2001," said Palm Tree Estate Inc. and Bell Air Golf and Country Club chairman of the board Kenichi Akimoto.

According to Senining the company is fighting to nullify the real estate mortgage, saying the bank had changed the loan agreement including the interest and foreign exchange rate after the loan was granted.

Senining said the Palm Tree Estates Inc., and Bell Air Golf Country Club is asking the Regional Trial Court (RTC) in Lapu-Lapu City to cancel the title issued in favor of PNB.

The Coral Reef Resort started operation in 1989 Akimoto said the company had invested about US$20 million to US$30 million for the entire development of the 50-room high-end resort.

Akimoto said if the court will grant the company's plea against PNB, he is going to sell the entire property to the Korean investor.