Lopez Holdings

 

Court to accept comments on MWSS-Maynilad Agreement The Regional Trial Court of Quezon City hearing the rehabilitation petition of Maynilad Water Services, Inc. has given all parties until April 13 to submit comments on Maynilad's compromise agreement with MWSS.

In a recent TV interview, Maynilad counsel Helena Calo reminded the public that the Department of Justice, through Undersecretary Manuel Teehankee is "eliciting comments that may improve the compromise agreement now before the court."

The MWSS-Maynilad joint reorganization plan was submitted to the RTC on March 18 to replace Maynilad's original rehabilitation petition filed in November 2003.

Aside from MWSS and Ondeo who have earlier expressed support for the compromise plan, other Maynilad creditors such as the following are expected to file their respective comments with the court: Citibank N.A., JP Morgan, Credit Lyonnais Manila Offshore Branch, Fortis Bank N.V., KBC Bank, Development Bank of the Philippines, BNP Paribas, Credit Industriel et Commercial, Rizal Commercial Banking Corp., International Commerce Bank of China, Equitable PCIBank, Barclays Bank, UFJ Bank, Bangkok Bank, Plc, CDC Finance-CDC IXIS, Chang Hwa Commercial Bank, Ltd. (Singapore Branch), Chinatrust (Phils.) Commercial Bank Corp., United World Chinese Commercial Bank and EastWest Bank.

In the original rehab plan, Maynilad proposed all liabilities to be restructured and repaid over a period of nine years.

The compromise agreement between MWSS and Maynilad, on the other hand, has two parts. The first part is the Quasi-Reorganization where the sponsors (Benpres and Ondeo) write off US4 million of their original investment in and P1 billion of advances to Maynilad, and the conversion of a portion of Maynilad's debt to equity, with creditors' consent. The second part is the draw of US million on the Performance Bond and the restructuring of all remaining Maynilad debt for 7-8 years.

The write-off of US4 million in equity and P1 billion in advances by Benpres and Ondeo eliminates Maynilad's accumulated losses caused by the drastic depreciation of the peso against the dollar. The conversion of some debt to equity transfers majority ownership to government and significantly reduces the debt of Maynilad. This gives the government a free hand to reconfigure the concession.

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Lopez Holdings Corporation 
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