Vol. XXII, No. 87 [ BusinessWorld Onine ]
Tuesday, November 25, 2008 | MANILA, PHILIPPINES
BY MARITES S. VILLAMOR, Cebu Bureau Chief
MACTAN, CEBU — Gatchalian-led Waterfront Philippines, Inc. has received a reprieve after creditor Philippine National Bank (PNB) agreed to suspend foreclosure proceedings involving two hotels in Cebu.
A settlement agreement, signed by Waterfront and PNB on November 21, was filed at the Lapu-Lapu Regional Trial Court in Mactan yesterday morning in an attempt to amicably settle a dispute arising from an unpaid loan.
Judge Victor Teves of the Lapu-Lapu RTC Branch 54 said he had rendered a decision, but declined to disclose the details pending the delivery of copies to the counsels of both parties.
Under the agreement, Waterfront has to pay P40 million upon the execution of the deal. It then has to deliver the remaining principal loan amount of P739.6 million as well as unpaid interest within 90 days, or by February 19, 2009 at the latest.
It was not known if the initial payment had been made. The P40 million is to be applied on the interest due, estimated to have reached P79.8 million as of November 18.
Waterfront will also reimburse, within 90 days, PNB foreclosure expenses amounting P19.15 million. If Waterfront fails to pay within the three-month period, it will be levied a penalty of P239.5 million and forfeit the right to object to foreclosure proceedings.
The agreement was signed by Waterfront Treasurer Elvira A. Ting and PNB Vice-President for Remedial Management Aida M. Padilla.
The agreement staved off foreclosure of the 562-room Waterfront Cebu City Hotel & Casino, the biggest in Cebu City and Waterfront’s flagship property, and the 167-room Waterfront Airport Hotel & Casino Mactan.
Waterfront and its subsidiaries, Waterfront Cebu City Casino Hotel, Inc. and Waterfront Mactan Casino Hotel, Inc., had secured a $30-million loan from PNB in 1997.
It was to be used to partly finance construction of the Cebu City hotel.
The loan has since been converted to peso and restructured three times.
PNB called on the loan in October, several months after Waterfront failed to pay monthly amortization and interest charges of about P18 million.
Waterfront fought the foreclosure move and filed a complaint for injunction at the local court, arguing, among others, that it had already paid around P1.2 billion, P400 million for the principal and P800 million in interest, as of 2007.
