Lopez Holdings


Benpres buys back US$ 260M of outstanding debt
Manila, August 24, 2009 - Benpres Holdings Corporation (PSE symbol: BPC) gained headway in its debt restructuring effort with the settlement of its debt to its biggest creditor, Avenue Asia Group.

According to a disclosure to the Philippine Stock Exchange, Benpres paid US million for the buyback of US$ 260 million in principal debt, representing a 35% discount on the face value.

Benpres is the parent company of ABS-CBN Broadcasting Corporation (PSE: ABS), the country's leading multi-media content provider, and of First Philippine Holdings Corporation (PSE: FPH), a holding company with investments in power generation, power distribution and manufacturing.

Benpres president and chief operating officer Angel S. Ong, said the 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 US$ 70 million, we can all look forward to operating under normal conditions," Ong said.

Benpres was hit hard by the Asian financial contagion in 1997 that devalued the Philippine peso from P26 to more than P50 per dollar. Failed investments in water distribution and telecom prevented Benpres from meeting its debt obligations and pursuing further investment activities.

In 2002, Benpres declared a standstill on US 0 million in direct and contingent obligations. Its exit from Maynilad Water Services, Inc. in 2005, and subsequent buyback of debt funded from the sale of non-core assets, pared down the debt to US 0 million as of end-2008. The settlement with Avenue Asia was funded from the sale of the company's interests in First Philippine Infrastructure, Inc. (toll roads), Rockwell Land Corporation (property development) and shares of Digital Telecommunications Philippines, Inc.

Ong said, "The 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."  

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Lopez Holdings Corporation 
16/F North Tower, Rockwell Business Center Sheridan, Sheridan St. corner United St., 1550 Bgy. Highway Hills, Mandaluyong City, Philippines

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