Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 7628

Issues raised vs GMR-Megawide’s NAIA proposal

The rehabilitation of the Ninoy Aquino International Airport (NAIA) appears uncertain as the pandemic pummels the aviation and travel industries. — REUTERS

THE proposed rehabilitation of the Ninoy Aquino International Airport (NAIA) has hit another snag, as the government asked the joint venture of Megawide Construction Corp. and GMR Infrastructure Ltd. to comply with some requirements under the Build-Operate-Transfer (BOT) law.

A Transportation department official said the National Economic and Development Authority (NEDA) Board’s Investment Coordination Committee (ICC) wanted the GMR-Megawide tandem to clarify issues “on financial capacity and the joint and solidary liability agreement of the consortium,” before negotiations can continue.

“There was a deliberation (on Wednesday) and the ICC-Technical Board noted a number of pending compliance with certain requirements of the BOT law, so we have conveyed that to the proponent and we asked them to comply,” Transportation Undersecretary for Planning & Project Development Ruben S. Reinoso said in an online briefing.

Megawide Chairman and Chief Executive Officer Edgar B. Saavedra was asked to comment but no reply has been made as of press time.

Elenita M. Fernando, senior assistant general manager of the Manila International Airport Authority (MIAA), said in the same briefing they will meet again with the proponent by next week to discuss the outstanding issues raised by the NEDA-ICC.

On July 15, the GMR-Megawide tandem received original proponent status (OPS) for the NAIA upgrade, after the government revoked the OPS granted to the so-called super consortium of the country’s top conglomerates.

The consortium — originally composed of Aboitiz InfraCapital, Inc.; AC Infrastructure Holdings Corp.; Alliance Global Group, Inc.; Asia’s Emerging Dragon Corp.; Filinvest Development Corp.; JG Summit Holdings, Inc; and Metro Pacific Investments Corp. — had failed to get the government’s approval to revise the project terms and conditions to reflect the impact of the coronavirus pandemic on the aviation and travel industry. 

Megawide Director Manuel Louie B. Ferrer earlier said the government gave its own terms of reference for the NAIA project when it granted OPS to their consortium. 

Under the BOT rules, a company that has been granted OPS for an unsolicited proposal will be subjected to a Swiss challenge after the award. At this stage, other companies are invited to counter the proposal, and the original proponent will have the right to match them.

MIAA’s Ms. Fernando declined to give a timeline for the Swiss challenge.

The tandem of Megawide and GMR submitted in March 2018 a $3-billion (approximately P148.43-billion) unsolicited proposal to rehabilitate the NAIA over an 18-year period. It had tapped American company The Mitre Corp. as its technical partner for the project.

At that time, GMR-Megawide said they plan to increase NAIA’s capacity to 72 million annual passengers from its original 30.5 million by boosting the airfield capacity to 950-1,000 aircraft movements per day and expanding existing terminals to more than 700,000 square meters.

However, their proposal was set aside in favor of the super consortium, which was granted OPS in September 2018 after tweaking its proposal and reducing the project cost to P102 billion from P350 billion.

According to Section 10.6 of the revised implementing rules and regulations of the BOT law or Republic Act No. 6957, the “second complete proposal will only be entertained if the first one is rejected.”

“Otherwise, the second proposal will be considered only if there is a failure in the negotiation of the first proposal or during the ‘invitation for comparative proposals.’”

The NAIA rehabilitation project is among the projects identified as having a “high risk” of becoming non-viable due to the pandemic in a recent working paper by economists Jedd Carlo F. Ugay, Monica Paula Lavares, Jerome Patrick D.R. Cruz, and Marjorie S. Muyrong of the Ateneo de Manila University’s Department of Economics and Center for Economic Research and Development.

The Transportation department argued that “investments in unsolicited proposals are to be made by the proponents who are in the position to assess the viability of their investments.” — Arjay L. Balinbin

Car firms seek review of gov’t plan as sales fall

By Jenina P. Ibañez, Reporter

CAR MANUFACTURERS are asking the government to review the conditions of support programs for the sector as the pandemic slows down production.

The government in June said that it had no immediate plan to revise a fiscal support program for automotive companies investing in local production after industry sales slumped due to the pandemic.

Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp. are participating in the Comprehensive Automotive Resurgence Strategy (CARS) program, which offers fiscal support to car companies that locally produce 200,000 units of high-volume car models for six years.

“We are quite concerned about the survival of the auto industry,” Toyota Motor Philippines First Vice-President Rommel R. Gutierrez said in a press conference on Thursday.

Mr. Gutierrez, who is also the president of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI), said that it is possible that participants in the CARS program will not be able to reach their target volumes.

“On manufacturing, you know the CARS program, it’s ongoing and it’s an industry issue actually because we’re talking of manufacturing here. Because of the slowdown in sales, the local manufacturing, specifically the Vios and the Mirage — these are the models enrolled under the CARS program — also are badly hit,” he said.

“The danger there is that there are commitments under the CARS program that we have to meet and definitely, with all this negative impact on the automotive industry, there is a threat that the participants of CARS program may not be able to achieve the target volume as committed.”

He said that sustaining competitiveness is one of many issues the industry is facing.

“At this time, we think it’s very appropriate that we review the policies and the conditions of government support. We need appropriate assistance and collaboration with the government so that we could maintain local production and at the same time be competitive.”

Car sales saw a 48.7% decline in the seven months to July to 105,583 units compared with the same period a year ago, a joint report by CAMPI and Truck Manufacturers Association  said.

Year to date, commercial vehicle sales dropped 47.6% to 75,514 units, while passenger car sales fell 51.4% to 30,069 units.

Toyota retained its spot as the market leader with 43% market share in July, with sales tumbling 37.4% to 8,833.

Linggo ng Musikang Pilipino goes digital

THESE ARE uncertain times with a pandemic wreaking havoc on people’s health and the country’s (and the world’s) economy, but uncertain times notwithstanding, Filipinos will do what they are best at doing: adapt and endure. The same goes for the music industry which at first was halted by one of the longest lockdowns in the world as it is an industry that thrives in front of a live audience, but it has since adapted and re-programmed to be visible digitally.

And that’s what Linggo ng Musikang Pilipino (Philippine Music Week) is doing this year as the six-year-old music festival celebrating Original Pilipino Music is going digital from Aug. 22 to 28 via the Organisasyon ng Pilipinong Mang-aawit (OPM) Facebook page.

“We’re actually very excited for this festival because it’s online… more people wanted to join this time. We are not bound by schedules and traffic like before,” Christian Bautista, singer, board member, and lead convenor of Linggo ng Musikang Pilipino 2020, said during a press conference on Aug. 19 via Zoom.

Mr. Bautista also noted that many performers joined this year’s festival because many singers are out of work and the festival will help them get exposure and be discovered and some will be getting “some honorarium.”

The festival normally held in the last week of July but it was forced to move to a later date because of lockdown. But this worked in the organizers’ favor as August is also the Buwan ng Wikang Pilipino (Filipino Language Month).

This year’s festival revolves around the theme  “Musikang Pinoy. Buhay at Ipagpatuloy” (Filipino Music. Alive and Continuing), and will feature a variety of performances including a spotlight on regional music acts from North and South Luzon, Visayas, and Mindanao.

The festival will also be holding several music workshops and webinars including a songwriting workshop by Ebe Dancel and Jazz Nicolas and one on the history of Filipino music by National Artist Raymundo “Ryan” Cayabyab.

The festival will also be launching the OPM Archive on Aug. 26 and throughout the week there will be busking sessions, album and single launches, and an open mic night.

The Linggo ng Musikang Pilipino will conclude with a grand concert on Aug. 28, with performances by the Itchyworms (which just launched its fifth studio album this week), Christian Bautista, Noel Cabangon, Bayang Barrios at ang Nilayagan, among many others.

Asked about the importance of music in a pandemic, Mr. Cabangon, who is the festival director, said “singers and performers are frontliners too.”

“[I]n a lot of fundraisers, music is at the center. So Filipino music is very important because it brings with it our experiences, our language, our sensibilities, our consciousness, and our feelings,” Mr. Cabangon said in Filipino at the press conference.

The Linggo ng Musikang Pilipino runs from Aug. 22 to 28 at the Organisasyon ng Pilipinong Mang-aawit Facebook page (https://www.facebook.com/PinoySingers/).

For the full schedule, visit the website at https://www.lmp.com.ph/ and the Facebook page. — Zsarlene B. Chua

ABS-CBN incurs P3-billion loss after franchise rejection

ABS-CBN CORP. on Thursday reported an attributable net loss of P3.16 billion for the second quarter of the year, swinging from a profit of P695.80 million in the same period last year, after Philippine lawmakers rejected its bid to secure a 25-year broadcast franchise.

“Advertising revenues suffered a sharp decline in the second quarter of 2020 following the issuance on May 5, 2020 by the National Telecommunications Commission (NTC) of a Cease and Desist Order (CDO) to the company, prohibiting its continuing broadcast operations effective immediately,” the network said in its quarterly report.

ABS-CBN did not indicate the details of its advertising revenues for the second quarter, but it reported a 53.9% decline for the first half of the year to P5.20 billion from P11.29 billion in the same period last year.

The network’s advertising revenues for the first three months went down 20.8% to P4.28 billion from P5.40 billion a year ago. Its first-quarter consumer sales also dropped 12.1% to P4.38 billion from the previous year’s P4.95 billion. For the first half, the network reported a 14.2% decline in consumer sales to P8.12 billion from P9.52 billion.

ABS-CBN’s total revenues for the second quarter dropped 55.17% to P4.68 billion from P10.44 posted.

The network further trimmed its production costs for the quarter to P2.13 billion from the previous year’s P3.43 billion.

The NTC’s issuance of a cease-and-desist order against ABS-CBN’s broadcast operations in May and a separate order in June against its digital TV transmission in Metro Manila added to the impact of the coronavirus pandemic on the company’s financial performance during the quarter because such events “drove down both the advertising and consumer revenues of the company,” the network said.

ABS-CBN announced in July that it would implement a retrenchment program effective at the end of business day on Aug. 31.

The company’s theme park business, KidZania Manila, will permanently close starting Aug. 31.

ABS-CBN said it plans to continue to operate in other businesses that do not require a broadcast franchise, namely: international licensing and distribution, digital and cable businesses, and syndication of content through streaming services.

The company also vowed to honor all its existing obligations for goods delivered and services rendered by third-party suppliers. It said it is willing to negotiate “new terms” for such obligations when needed.

Shares in ABS-CBN on Thursday closed 0.41% higher at P7.28 apiece. — Arjay L. Balinbin

Expect less extravagant shows in post-coronavirus world, ABBA’s Bjorn Ulvaeus says

STOCKHOLM — Extravagant musical productions such as Mamma Mia! will need to be scaled down when they go again after the coronavirus lockdowns end, ABBA star and Swedish pop impresario Bjorn Ulvaeus says.

The 75-year-old, who co-penned hits like “Waterloo” and “Dancing Queen” for ABBA with fellow member Benny Andersson and the band’s manager Stig Anderson, has spent a lot of his time watching movies and listening to books during the pandemic, which has shut theaters and cinemas across the world. He has also found a new love in kayaking.

But Ulvaeus is also working on ways to improve social distancing at theaters so that Mamma Mia! and Mamma Mia! The Party can open again soon.

“We’ve kept the cast staff and everyone on furlough,” he told Reuters in a Zoom interview from his island retreat in the Baltic off Stockholm.

“And we look forward to maybe opening in January, February, if we’re lucky. And meanwhile, we’re trying to create a social distancing environment in those places as much as we can.”

The pandemic lockdown has been a tough time for musicians and artists globally, and Ulvaeus said productions would look different when theaters finally open up again.

“The big, big, luxurious musical productions are so expensive to run, so expensive to create and to produce that you need at least 80, 85% capacity,” he said.

“So if you’re down to, say, 60 or 50, that means that the productions have to be smaller.”

Ulvaeus is involved in all the Mamma Mia! productions in London, which include the original musical and Mamma Mia! The Party, and is trying to get a Party to open in Gothenburg, Sweden before the end of the year.

He also has a hand in the Super Trouper exhibition in London and the ABBA Museum in Stockholm.

Ulvaeus said his own schedule would also look different in future, with less travel and with more meetings that have to be held face-to-face taking place in Stockholm.

“Since I’m at the age when corona is especially dangerous, I will have people fly to me in Stockholm instead of vice-versa,” he said. — Reuters

Winning films in independent film fest announced

NOT EVEN the pandemic could stop the Gawad CCP Para Sa Alternatibong Pelikula At Video, the longest running independent film competition in Asia, from gathering the best works of Filipino filmmakers in Animation, Experimental, Documentary, and Short Feature.

On its 32nd year, Gawad Alternatibo — like the 16th Cinemalaya — migrated online due to the COVID-19 pandemic. Dubbed Ligalig: Gawad Alt 2.0, the online edition of the film competition and festival ran from Aug. 7 to 15 via CCP Vimeo for the screenings, and Cinemalaya FBLive, Gawad Alternatibo FBLive, and KUMU for talkbacks and special events including the launch of its 5th Category on Emerging Media, an exhibition of current works, which featured interactive games being developed by Filipino online gamers.

During the awarding program held on Aug. 15, Gawad Alternatibo recognized the best films in the various categories.

For the Animation category, Sarung Banggi by Dominic James Barrios won the top prize, as well as the Best Regional Entry. Bigas by Bryan Almoneda took home the 2nd prize. Meowbot3000 vs Fishzilla by Mio Dagsaan took home the 3rd prize and the Best Entry For/On/By Children. Honorable Mention was given to Pauwi Ka Na Ba? by Angel Tomas.

Book illustrator/artist Bernadette Solina-Wolf, comic book artist-animator Arnold Arre, and another animator-filmmaker/sound engineer RJ Mabilin made the final decision for the winning entries in the Animation category.

Based on the decision of the jury composed of director/sound designer Karl Glenn Barit, visual artist Russel “Dr. Karayom” Trinidad, and director/production designer Juan Manuel “Whammy” Alcarazen, there was no first prize winner in the Experimental category. Two films, however, won second prize — Hollow Blocks by Jonathan Jose Zamora Olarte and Power Violence by Tron Victoriano and Chino de Vera. Third prize and Best Regional entry went to Laugh and Die by Jonathan Jose Zamora Olarte. Blinkers by JP Bo noan bagged the Best Entry For/On/By Children and Honorable Mention awards.

The winners in the Documentary category are: Dagami Daytoy (This is our Land) by Nonilon Abao, First Prize; Panaghoy sa Selda by Ruth Camacho, Second Prize; Still Here, Still Walking by Katrina Isabelle G. Catalan, Third Prize; and Teatro ng Pagtangis by Glenn Atanacio, Honorable Mention.

Filmmaker/professor Adjani “Jaja” Arumpac, visual artist/filmmaker J. Luis “JL” Burgos and documentary producer Bryan Kristoffer Brazil decided on the winners in the Documentary category.

Victoriana by Cecil Chloe L. Capatoy received First Prize in the Short Feature category, followed by Sorry by Kristian A. Cruz (2nd Prize), Sa Hunasan may Santermo (At the Shoreline there’s Santermo) by Niño B. Maldecir (3rd Prize), and Tambay by Zyril Bundoc (Honorable Mention). Anne’s Talkshow by Gian Andre Rembrandt Arre and Maupay ng Aga, Puniti Kita (Good Morning, Let’s Fight) by Joi Villablanca went home with Best Entry For/On/By Children and Best Regional Entry, respectively.

The jury for the Short Feature category consisted of director Arden Rod Condez whose film John Denver Trending won the 2019 Cinemalaya Best Film, director Ida Anita del Mundo whose film K’na, the Dreamweaver won the Best Production Design and Special Jury Prize in the 2014 Cinemalaya, and actress Bela Padilla who starred in the 2016 Cinemalaya finalist I America by Ivan Andrew Payawal.

Pandemic causes Emperador’s spending cut

By Adam J. Ang

EMPERADOR, INC. has slashed its capital expenditure (capex) this year by 40% due to the impact of the global coronavirus pandemic on its operations.

“Considering the current environment, we have held back capex by about 40% this year,” Emperador President Winston S. Co said during the company’s annual stockholders’ meeting, Thursday.

The decision considered the impact of the pandemic on its capacity to expand, the rollout of strategic projects, and depreciation of its value.

To recall, Alliance Global Group, Inc., its parent, reduced its capital expenditure to P42 billion across businesses with Emperador only getting P1 billion for the rest of the year.

Emperador posted a 23.8% growth in second-quarter attributable income to P1.87 billion despite a ban on liquor sales in the Philippines. Its first-half core earnings slightly went up 2.5% to P3.31 billion.

The company saw its quarterly revenues increase by 4% to about P10.7 billion, bringing its first-half revenues to dip slightly to P21.06 billion.

“Given the fluidity of the situation, it is difficult to see a clear path ahead,” Mr. Co said.

“However, if the situation remains stable and the world returns to some sort of normality, we expect both our brandy and whiskey businesses to perform quite good this year and hopefully to beat last year’s performance,” he added.

This week, the liquor company started trading as part of the 30-member benchmark Philippine Stock Exchange Index (PSEi), which includes corporations with the highest market capitalization. Presently, it has a market value of P163 billion.

The company owns Emperador Distillers, Inc., Scotch whiskey maker Whyte and Mackay Group and Spain-based Bodegas Fundador.

On Thursday, shares in Emperador inched down 0.79% to close at P10.10 each.

Sta. Lucia plans P8-B bonds issuance

STA. LUCIA LAND, Inc. is planning to offer up to P8 billion worth of either senior fixed-rate retail bonds or senior corporate notes to primary institutional lenders, or both.

In a regulatory filing on Thursday, the listed property developer said its board of directors want the company to come up with one or both of the said issuance.

It plans to tap China Bank Capital Corp. as its lead underwriter, issue manager and bookrunner for the debt paper offering, which will be under terms and conditions that it “may deem fair and reasonable and in the best interest of the corporation.”

It plans to file a shelf registration with the Securities and Exchange Commission for the senior retail bonds, and application for registration and listing with the Philippine Dealing & Exchange Corp. (PDEx).

In a recent regulatory filing, the property firm posted an 8% decline in comprehensive income to P674.27 million in the first semester because of the slump of the market price of its listed shares and a fall in revenue.

The company recorded a 31% drop in gross revenues to P2.43 billion between January and June as its operations were temporarily suspended during the quarantine months.

Limited operating mall tenants affected its rental revenues, which declined by 48%. Its real estate sales were also down by 22%.

On Thursday, shares in Sta. Lucia Land were unchanged at P1.86 apiece. — Adam J. Ang

Tiger King zoo closing down, owner blames animal rights ‘loons’

LOS ANGELES — The private wildcat zoo at the center of the hit Netflix series Tiger King is closing its doors permanently, its owner said, citing pressure from animal rights activists and inspectors.

“As of today, we have decided to close the old zoo effective immediately,” Jeff Lowe, the current owner of the Greater Wynnewood Exotic Animal Park in Oklahoma, wrote in a Facebook post.

Lowe said his license to run the zoo had been suspended for 21 days by US government inspectors, and that he had voluntarily forfeited it. Writing in the post on Tuesday, he said the collection of lions and tigers would “continue to have excellent care.”

Tiger King, the true crime series set in the world of private zoos and their eccentric owners, became a worldwide phenomenon when it was aired in March.

It told the story of flamboyant Oklahoma zoo keeper Joe Exotic, his rivalry with Florida big cat rescue activist Carole Baskin, and his imprisonment for hiring a hitman to try to kill her.

Lowe took over ownership of the Wynnewood park after Exotic, his partner, was convicted. In June, a judge in Oklahoma City handed control of the zoo to Baskin as part of a long-running dispute but Lowe was given time to wind down operations.

Lowe wrote that the Netflix, Inc. series had provided “an unfathomable source of income” for the zoo but had also made it “the target of every nutjob and animal rights loon in the world.”

Tiger King, which Netflix said was watched by more than 34 million people in its first 10 days on the platform, is in the running for six Emmy awards, including best documentary series, ahead of a ceremony in September. — Reuters

Virus to hit credit profiles of neobanks’ borrowers

SOME five million Filipinos have gained access to a formal account between 2017 to 2019, data from the Bangko Sentral ng Pilipinas showed. — BW FILE PHOTO

THE PHILIPPINES is one of the countries with the biggest potential in digital banking in the ASEAN given its wide unbanked population, although the coronavirus crisis may have hit possible borrowers’ profiles, Fitch Ratings said.

“Fitch Ratings believes that the Philippines and Indonesia have the largest market potential among the six major ASEAN markets due to their large unbanked segment and low household leverage,” it said in a note sent to reporters on Thursday.

About five million Filipinos have gained access to a formal account between 2017 to 2019, data from the Bangko Sentral ng Pilipinas released in July showed. This left 51.2 million adult Filipinos still unbanked or about 29% of the 72 million adult population, an improvement from the 23% in 2017. The study said the biggest hindrance to opening an account is the lack of money.

“The pandemic-induced economic crisis is likely to affect digital banks’ target segments more significantly given their generally weaker borrowers’ profile,” Fitch said.

The lack of digital infrastructure seen in the Philippines as well as in Indonesia is also a hindrance for neobanks, it added.

ING Bank N.V. Manila and CIMB Bank Philippines in 2019 started their digital-only retail banks in the country. Both lenders allow consumers to open accounts via a purely digital process and offer deposit rates of up to 4% to lure new clients.

Robocash Group, which was formerly doing financing in the country, has also expressed its interest in establishing a digital bank in the Philippines this year.

Fitch added that a viability requirement, paired with “incremental asset size and deposit restrictions” for new digital banks will help keep level competition.

“Philippines’ draft digital bank policy exposure indicates that the regulator is also planning to impose a similar business viability requirement and we expect neighbouring countries’ regulators to also adopt a similar approach in regulating digital-only banks,” it said.

House Bill 5913 which will be known as the Virtual Banking Act of 2020 if passed, mandates digital-only lenders to have a minimum capital of P20 billion to be raised in four years. The bill has been pending in the Lower House since January. — L.W.T. Noble

Pop star Britney Spears wants her dad out of the picture

LOS ANGELES — Britney Spears wants her father to be removed as the person that controls her business and personal affairs in a major change to her 12-year court-appointed conservatorship.

Ahead of a court hearing in Los Angeles on Wednesday, the 38-year-old pop star’s lawyer filed documents saying the singer is “strongly opposed to having James (Spears) return as conservator of her person.” The document gave no reasons for her stance.

Jamie Spears was appointed conservator in 2008 after the pop star’s life spiraled out of control and she was hospitalized for psychiatric treatment.

After a career comeback, the “Toxic” singer pulled out of a Las Vegas concert residency last year and briefly entered a mental health facility. She has not performed publicly since October 2018 and the court documents said it was “her stated desire not to perform at this time.”

The long conservatorship for the former teen pop phenomenon has been the target of a vocal #FreeBritney campaign by fans. They believe she is being kept a prisoner and is sending cryptic signals begging to be freed through her social media accounts, which usually consist of selfies or her dancing at home.

The fans greeted news of her request to oust her father as a victory and plan a demonstration outside the downtown Los Angeles courthouse on Wednesday.

“We know our girl #FreeBritney happy with the news today! Huge step,” tweeted Junior Olivas, one of her most ardent fans.

Spears wants control over her affairs to be given to her care manager, Jodi Montgomery, who was made a temporary conservator last year after Jamie Spears suffered a bout of ill health, according to the court documents.

Jamie Spears has dismissed the #FreeBritney campaign as a joke.

“All these conspiracy theorists don’t know anything,” Spears told the New York Post earlier this month. “It’s up to the court of California to decide what’s best for my daughter. It’s no one else’s business.” — Reuters

SEC invalidates share purchases in The Medical City; acquiring entities prepare legal remedies

A SHAREHOLDER group’s acquisitions of majority shares in Professional Services, Inc. (PSI), The Medical City’s operator, were nullified by the corporate regulator for allegedly being illegal and fraudulent.

The ruling came after the Securities and Exchange Commission’s (SEC) special hearing panel in November last year penalized Viva Holdings (Philippines) Pte. Ltd., Viva Healthcare Ltd., Fountel Corp. and Felicitas Antoinette, Inc. (FAI) for violating the mandatory tender offer rules under the Securities Regulation Code (SRC) and committing fraud in taking over PSI.

In an Aug. 13 decision, the Commission en banc added in the said resolution a provision to declare null and void all their share purchases in PSI since Aug. 1, 2013.

The shares bought by the group will be considered unsubscribed and allocated for subscription by investors.

The SEC also ruled to cancel their share acquisitions in Splash Corp., San Miguel Corp. and Insular Life Assurance Co. Ltd., and to revert these as treasury shares.

PSI is to reimburse Viva Holdings, Fountel, and FAI for the subscriptions that were nullified, once these were sold and paid for.

In a statement, Fountel’s majority owner Jose Xavier “Eckie” B. Gonzales said the decision forces The Medical City to pay the acquiring entities at least P10 billion in cash that they had invested since 2013.

“We are disappointed with the questionable decision of the [SEC], which our legal team believes to be arbitrary, unfounded, and, to a certain extent, overreaching. Fortunately, the law provides remedies that will allow these errors to be corrected,” he said.

Mr. Gonzales, who chairs the hospital’s board, said the SEC decision “adds further pressure and uncertainty to a hospital network already straining with the many problems caused by the COVID crisis, including its cash flow.”

To recall, the four entities were found to have breached Section 18 of the SRC and Rule 19 of the implementing rules and regulations of the code, the accompanying penalties of which the SEC wanted them to be held solidarily liable for.

The Commission en banc added that they also violated Section 26 of the SRC, which prohibits fraudulent transactions in the sale of securities.

In 2013, Viva Healthcare, Viva Holdings, FAI, and Fountel entered into a cooperation and shareholders agreement (CSA), “which effectively transformed their business relation into beneficial ownership over each other’s shares.”

The SEC said the entities have increased their collective shareholdings in PSI to more than 50%, mainly through subscriptions in the firm’s capital stock increases, which the regulator approved in November 2013, July 2014, August 2017 and October 2017, respectively. These stock increases, though, were maintained as valid.

In the meetings where these stock increases were discussed, the entities’ intention to gain beneficial ownership, thus taking control of PSI, was not made known to the company.

“The directors and other shareholders of PSI only learned about the CSA in 2017, as a consequence of a negotiation for Ayala Healthcare Holdings, Inc. to acquire shares in the company,” the regulator noted.

The Commission en banc said the parties “succeeded in making it appear and convincing” PSI that their purchases were independent of each other and that these will not be used to control the management, governance, and conduct of the business of the company.

All the processes involved in the share purchases, such as subscription contracts, deeds of assignments, and deeds of sale, were “tainted with illegality and fraud,” it said.

Further, the Commission en banc ordered the SEC’s general counsel to immediately resolve all cases related to the conduct of the meeting and the election of the members of the board of directors of PSI.

In the statement, Mr. Gonzales said his group “will exhaust all legal means possible to ensure that the SEC’s decision will not affect the continuing operations of The Medical City.” — Adam J. Ang

1...7,6277,6287,629...12,700Page 7,628 of 12,700
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube