MANILA - Benpres Holdings Corp., the publicly listed holding firm of the Lopez family, gained headway in its debt restructuring effort with the settlement of its debt to its biggest creditor, Avenue Asia Group.

In a disclosure to the Philippine Stock Exchange, Benpres said it paid $169 million for the buyback of $260 million worth of principal debt, representing a 35% discount on the face value.

It added that the funds used for the settlement came from the sale of Benpres' interests in non-core assets, including toll road firm First Philippine Infrastructure, telecommunications company Digital Telecommunications Philippines Inc., and upscale property developer Rockwell Land Corp.

Benpres president and chief operating officer Angel Ong said the debt buyback removes much of the uncertainty that has shadowed Benpres and its associated companies for the last several years.

"The debt restructuring exercise has previously affected the ability of our subsidiaries to raise funding for their own growth strategies. With our debt remaining at a manageable level of $70 million, we can all look forward to operating under normal conditions," Ong said.

Benpres is the parent of media conglomerate ABS-CBN Broadcasting Corp. and First Philippine Holdings Corp., which has investments in power generation, power distribution and manufacturing.

The company was hit hard by the 1997 Asian financial crisis, which devalued the Philippine peso to P50 per US dollar from P26. Failed investments in water distribution and telecom prevented it from meeting its debt obligations and pursuing further investment activities.

In 2002, Benpres had $560 million in direct and contingent obligations. It was able to pare down the amount to $330 million in 2008 following its exit from Maynilad Water Services Inc. and subsequent buyback of debt with proceeds from the sale of assets.

Ong said their remaining creditors have the option to either sell debt back to the company, subject to discount and funds availability, or sign a new loan agreement for a bullet payment after 12.5 years.

"This has been a standing offer since December 2008, and a number of creditors have in fact already signed up and availed of the plan," he noted
 

abs-cbnNEWS.com is the online news department of ABS-CBN Interactive Inc., a subsidiary of ABS-CBN Broadcasting Corp. ABS-CBN is a unit of Benpres Holdings Corp. Both are part of the Lopez Group of Companies.