Philippines firm takes steps to settle problems with creditors

Philippines property firm Cyber Bay Corp., which was joint-venture partner in the failed Cyber Bay-AMARI reclamation project in Manila Bay, is entering into a debt-for-equity scheme with creditors, in order to reduce liabilities that cannot be paid. The company will convert non-voting preferred shares into voting preferred shares and decrease the par value of shares in January 2011.

Philippine National Bank (PNB) will receive 1.51 billion preferred shares worth P150.77 million to trim loans to P720.22 million and Bangkok Bank will secure 4.98 billion preferred shares worth P497.88 million to cut loans to P2.22 billion.

The two creditors have already assigned the equity to other companies. The PNB loan was assigned to Opal Investments Portfolio, Inc., which then assigned the loan to One Bacolod Express Holdings, Inc. Cyber Bay has been in default on the PNB loan since 2000, with a penalty of 24% per annum. Bangkok Bank assigned the equity to Thai-based Allied Enterprise Co., Ltd., which then assigned the loan to the British Virgin Islands-incorporated New Bond Corp. The BVI firm then turned over the equity to local firm Primera Commercio Holdings, Inc., which already has a 24% stake in Cyber Bay.

The rate of the preferential and cumulative dividends to be issued to the creditors will be at 8% per year.

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