Vol. XXII, No. 85-A
Saturday, November 22, 2008 | MANILA, PHILIPPINES
GATCHALIAN-LED Waterfront Philippines, Inc. and Lucio Tan-controlled Philippine National Bank (PNB) on Friday agreed anew to settle the former’s obligation to the bank, and save Waterfront Cebu City Hotel & Casino and Waterfront Airport Hotel & Casino from foreclosure.
Waterfront said in a disclosure Friday that the company has signed such settlement agreement with PNB. But company officials declined to give details, saying they would release a statement on Monday.
"The agreement stipulates that Waterfront will pay its debts to the bank," was all Waterfront Chairman Renato B. Magadia would say in an interview.
Mr. Magadia said he does not know the details of the agreement since it was Waterfront President Kenneth T. Gatchalian and officials who signed the papers.
Waterfront External Counsel Tito E. Pintor, Jr. said both companies signed the settlement agreement around noon on Friday in Manila.
Mr. Pintor added that they were supposed to submit the agreement to the Lapu-Lapu Regional Trial Court Friday, but since it was a holiday for the city, they will file it on Monday.
PNB and Waterfront agreed in principle last Wednesday to restructure the latter’s loan anew, holding off the foreclosure of two hotels.
PNB counsel Estelito P. Mendoza, who could not be reached for comment yesterday, had said last Wednesday that the Cebu-based company and the bank will settle the problem amicably since the loan is going to be paid.
Waterfront had outstanding loans of P744.946 million as of last October 23, exclusive of penalties, expenses, charges and attorney’s fees.
PNB called on the loan last month and initiated foreclosure proceedings involving the 562-room Waterfront Cebu City Hotel, Waterfront’s flagship property and the biggest hotel in Cebu City, and the 167-room Waterfront Airport Hotel & Casino Mactan.
The original $30-million loan, secured in March 1997 by Waterfront and subsidiaries Waterfront Cebu City Casino Hotel, Inc. and Waterfront Mactan Casino Hotel, Inc. to finance the construction of the Cebu City hotel, was converted to peso and restructured thrice.
Waterfront had paid some P1.2 billion, P400 million for the principal and P800 million in interest, as of 2007.
Waterfront asked PNB again last June to restructure the balance, saying it was in the middle of negotiations with major leasing client Philippine Amusement and Gaming Corp. (Pagcor) for another contract. Rental receivables from Pagcor were assigned by Waterfront in 2004 to service the PNB loan as part of the third restructuring agreement.
Lamberto B. Mercado, Jr., vice-president for legal affairs of Waterfront’s parent Wellex Group, Inc., had said Waterfront expects to receive almost P20 million a month from Pagcor. This, he said, should be enough to cover the monthly amortization of P6 million for the principal and about P12 million in interest, based on the third restructuring deal. — Kristine Jane R. Liu
