THE board of Metro Global Holdings Corp. approved on Thursday an agreement with Fil-Estate Management, Inc. (FEMI) to assign to the latter income from some Metro Global units as partial payment of advances made by FEMI when it bought a stake in the company.
It said the arrangement will save Metro Global from paying interest on the advances.
“[Metro Global] agreed to partially repay the Advances from FEMI by way of allocating to FEMI dividends and other income from affiliates of the Company, in addition to the assignment of Depot Royalties,” Metro Global said in a disclosure to the stock exchange on Friday.
Metro Global first disclosed the advances of as much as P300 million in a November filing.
FEMI purchased P750 million worth of Metro Global shares — 750 million common shares at P1 each.
As payment, the parties agreed that P500 million of share payment will be executed by offsetting outstanding payables of Metro Global to FEMI.
FEMI assumed Metro Global bank debt including interest and penalties totaling P3 billion in 2002 and also took on the cost of buying out minority stakes worth P180 million in 2005.
Metro Global’s board approved in September raising the firm’s authorized capital stock to P5 billion from the current P2 billion amid plans to raise funds from prospective investors.
Metro Global has equity interests in Metro Rail Transit Holdings, Inc. and MRTH II.
Trading in Metro Global’s shares have been suspended since February 2007.