VITARICH Corporation is looking to convert the company’s debts into equity, as it hopes to see a healthy balance sheet by next year.
The Bulacan-based feeds and livestock company said the debt-to-equity conversion, its second in four years, will be worth P400 million.
“By paying the company’s remaining debt with shares, the company will conserve much-needed cash for its operation and its expansion plans. Also, paying the remaining debt with shares instead of doing a ‘dacion’ of its core assets will allow Vitarich to benefit from the rental income and future increases in real estate value of the non-core assets,” Vitarich Chief Executive Officer and President Ricardo Manuel M. Sarmiento said.
He said Vitarich shareholders have also approved the plan to undergo quasi-reorganization, allowing it to eliminate the deficit which, as of end-2016, stood at P2.417 billion.
“After the quasi-reorganization abolishes the company’s deficit, Vitarich can then already declare dividends to its shareholders from the unrestricted retained earnings that will subsequently be generated,” Mr. Sarmiento said.
At the same time, Vitarich is aiming to sustain the growth momentum it has seen so far this year.
For the first nine months of 2017, Vitarich recorded P107 million in consolidated net income, 21 times higher than the P5 million during the same period a year ago, driven by 27% increase in sales revenues.
Mr. Sarmiento said the company set aside a capital expenditure of P130 million for 2018.
Vitarich is also planning to build another feed mill, expected to produce 20 tons per hour, in Luzon.
“In Batangas, we also have plans to put up our own feed mill. We’re estimating it be to around P400 million. We hope to groundbreak by mid-next year, it will take about 14 months for the construction so if we’re successful in groundbreaking by June it will be operational by fourth quarter in 2019,” Mr. Sarmiento said. — Anna Gabriela A. Mogato
