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Clock ticking for Waterfront; group owes PNB P740 million

Vol. XXII, No. 140 [ BusinessWorld Online ]

Tuesday, February 17, 2009 | MANILA, PHILIPPINES


CEBU CITY — The 90-day reprieve given to Waterfront Philippines, Inc. and its two subsidiaries by creditor Philippine National Bank (PNB) will end in two days.

Unless Waterfront fully pays its P739.6-million loan and the unpaid interest by Thursday, Feb. 19, PNB would either pursue foreclosure proceedings involving two Waterfront hotels in Cebu or secure a writ of execution from the Lapu-Lapu Regional Trial Court Branch 54. Waterfront also faces a penalty of P239.5 million.

If Waterfront is able to settle its account, both parties will simply file a manifestation in court that neither of the two options available to PNB would be resorted to.

Aside from the P40 million that was supposed to have been paid by Waterfront following a settlement agreement signed with PNB in November, it was not known if Waterfront has made other payments.

"At the right time, we will issue a statement," said Rexlon T. Gatchalian, a former Waterfront executive vice-president who is now a congressman.

The P40 million was applied on the interest, which reached P79.8 million as of Nov. 18. The loan earns an interest of 12% per annum after Nov. 18. Waterfront is also required to reimburse by Feb. 19 PNB’s foreclosure expenses amounting to P19.15 million.

In November, Waterfront and PNB reached a deal and immediately notified the Lapu-Lapu Regional Trial Court.

The agreement staved off the 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 subsidiaries Waterfront Cebu City Casino Hotel, Inc. and Waterfront Mactan Casino Hotel, Inc. secured a $30-million loan from PNB in 1997 to partly finance the construction of the Cebu City hotel. The loan has since been converted to pesos and restructured three times.

PNB called on the loan in October, several months after Waterfront failed to pay its monthly amortizations and interest charges. Waterfront fought the foreclosure, saying it has already paid around P1.2 billion — P400 million for the principal and P800 million in interest — as of 2007. — Marites S. Villamor

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